NEWS RELEASE DECEMBER 2016
Filtration Market Rankings Change with Two Acquisitions
Two significant mergers in the filtration industry have taken place in the last month. Lydall has acquired Gutsche and Parker Hannifin has acquired Clarcor. Lydall’s acquisition is relatively small but their increase in market share is large. Parker Hannifin’s acquisition is large but their increase in market share is relatively small. One reason for this is that Lydall is nearer the beginning of the supply chain where total revenues are less. The second reason is that Lydall has focused on a niche market, whereas the Parker acquisition is much broader based.
Lydall, Inc. has entered an agreement to acquire MGF Gutsche GmbH & Co. KG (“Gutsche”) for approximately $58 million in cash. The business consists of operations in Germany and China. Gutsche’s fiscal year ends on December 31, 2016 and revenue and EBITDA for these operations are forecasted by Gutsche to be approximately $50 million and $6 million, respectively.
Lydall has recently acquired Texcel and they purchased Andrew several years ago. These previous acquisitions plus Gutsche are providing Lydall with a market share approaching 20 percent in high performance non-woven media for fabric filters.
|Fabric Filter Bag and Media Revenues 2016 $ Millions|
|High Performance Non-Woven Media||800|
|Lydall High Performance Non-Woven Media||90-120|
|Gutsche High Performance Non-Woven Media||45|
|Total High Performance Non-Woven Media||135-165|
|Lydall % of High Performance Non-Woven Media||17-20%|
Other competitors in the high performance non-woven area for fabric filters are BWF, Xiamen Savings and Testori. An increasing number of Asian suppliers have also entered the market.
Parker Hannifin will acquire Clarcor for $4.3 billion. Clarcor is a diversified manufacturer of mobile, industrial and environmental filtration products with annual sales of approximately $1.4 billion and 6000 employees worldwide. Clarcor brands include Clarcor, Baldwin, Fuel Manager, PECOFacet, Airguard, Altair, BHA, Clearcurrent, Clark Filter, Hastings, United Air Specialists, Keddeg and Purolator. The acquisition of Clarcor adds a broad range of industrial air and liquid filtration products and technologies to Parker Hannifin’s filtration portfolio. With approximately 80 percent of Clarcor’s revenue generated through aftermarket sales, the acquisition is expected to significantly increase recurring revenue in Parker Hannifin’s Filtration Group.
|Filtration Revenues 2016 $ millions|
|Clarcor Revenue 2015||1400||590||810|
|Parker Filtration and Engineered Materials||2500||2300||200|
|Gas Turbine Inlet Air||100||100|
|Gas Turbine Market Share||18%||18%|
|Process Liquid Filtration||100||100|
The combined company has full portfolios in some segments of filtration and partial in others and is not a player in many segments.
|Parker Clarcor Combination|
|Filter Type||Portfolio Coverage||Market Ranking|
|Fuel Filters - Mobile||100%||High|
|Oil Filters - Mobile||75%||High|
|Air Filters - Mobile||75%||High|
|Hydraulic Filters - Industrial||100%||High|
|Gas Turbine Inlet Air||100%||High|
|Natural Gas Coalescer||100%||Medium|
|Cartridge Filters for Process Liquids and Water||75%||Low|
|Dust Collector Bags||100%||High|
|Scrubbing and Acid Gas Removal||0||Low|
|Cross Flow Membranes||0||Low|
|Sedimentation and Centrifugation||0||Low|
The new Parker will be a leader in dust collector bags. They buy the roll goods from companies such as Lydall. Clarcor has moved vertically to manufacture media for HVAC but is a small player in roll goods manufacturing.
Parker has expanded and is a major player in filter elements. It is not competing in system work except in some narrow areas such as gas turbine inlet filtration. However, because of the fractured nature of the filtration industry, it is a market leader in an expanded number of segments thanks to this acquisition.
The market shares of suppliers are continually tracked in:
Coalescer Supplier Program http://home.mcilvainecompany.com/index.php/markets/28-energy/1124-n065