Global safety equipment manufacturer MSA Safety Incorporated (NYSE: MSA) today announced it has completed its acquisition of Bacharach, Inc. in a transaction valued at $337 million. Based in New Kensington, Pa., Bacharach is a leader in gas detection technologies used in the heating, ventilation, air conditioning and refrigeration (HVAC-R) markets, with annual revenue of approximately $70 million.
"We're very excited to officially welcome Bacharach to the MSA family," said Nish Vartanian, MSA Chairman, President and CEO. "Many industries today are placing significant focus on monitoring and managing the usage of refrigerants for safety, environmental and efficiency purposes. With a leading gas detection portfolio, Bacharach provides MSA with access to attractive end markets, while aligning well with our mission and our product and manufacturing expertise."
Over the past several weeks, Mr. Vartanian said MSA and Bacharach have worked collectively to establish robust integration plans. "At the center of this process is a highly skilled, cross-functional integration team comprised of leaders from both organizations," Mr. Vartanian commented. "As we prepared for the closing of this transaction, the team made great progress in developing a blueprint that will ensure integration success in the months ahead."
In conjunction with the closing, MSA announced that Aaron Tufts will serve as the Integration Leader for the acquisition. Mr. Tufts most recently served as MSA's General Manager of Fixed Gas and Flame Detection (FGFD) products. He joined MSA as part of the company's 2010 acquisition of General Monitors. Over his career, Mr. Tufts has held various roles of increasing responsibility in both sales and marketing. A chemical engineer by trade, Mr. Tufts holds a bachelor's degree from Case Western Reserve and an MBA from the University of Pittsburgh.
As announced previously, MSA Senior Vice President and Chief Financial Officer Ken Krause will serve as the Executive Sponsor of the acquisition. In this role, Mr. Krause will have oversight of the Bacharach integration process. Mr. Tufts will report to Mr. Krause.
"Aaron brings to this assignment a deep understanding of the fixed gas and flame detection market, as well as a strong track record of developing successful relationships and growth strategies in key markets," Mr. Krause said. "In addition, being with a company that was acquired by MSA makes him an exceptional choice to lead our day-to-day integration efforts."
The transaction was financed through a combination of fixed and variable incremental borrowings. In conjunction with the acquisition closing, MSA today issued $200 million of 15-year senior notes with a fixed interest rate of 2.69 percent. Principal payments will begin in 2031 and continue through maturity in 2036. The remainder of the transaction was financed with MSA's senior revolving credit facility with a variable interest rate of approximately 1.25 - 1.50 percent. The total after-tax cost of financing is less than 2 percent.
Related to the acquisition, MSA expects to record approximately $4 million of incremental stock compensation expense in the second quarter of 2021, which will impact GAAP and adjusted earnings per share.
For more information visit MSA's web site at www.MSAsafety.com.