Mark IV Industries Inc., the local Fortune 500 holding company that grew rapidly in the 1980s by purchasing other businesses, has added another firm to its portfolio -- the sixth acquisition this year.
The Williamsville-based enterprise announced Monday that it has purchased Vapor Corp. for $39.5 million from Brunswick Corp. Vapor, with headquarters in Niles, Ill., and a factory in Montreal, employs 800 people making automatic door opening and air conditioning systems for buses and subway cars.
Mark IV announced in March that it was engaged in talks to buy Vapor but later it indicated those negotiations had broken off. The acquisition is a friendly arrangement because Brunswick, based in Skokie, Ill., is facing financial problems and needs a cash infusion, Brunswick has said.
"We are encouraged by the long-term growth opportunities we see in the domestic and international mass transit markets over the balance of the decade, and we believe Vapor is well positioned, through its relationships with the major railcar and bus vehicle builders, to effectively serve both North American and European markets," Sal H. Alfiero, Mark IV's chairman, said in a prepared statement.
With annual sales of $66 million, Vapor is North America's largest manufacturer of door systems for subway cars, buses and railcars. The Vapor acquisition will boost Mark IV's annual revenues to well over $1 billion.
"The purchase of Vapor Corp. is consistent with our stated program to achieve critical mass in certain of our business groups, through acquisition and internal growth," Alfiero said. He also noted that with the addition of Vapor, annual sales for Mark IV's mass transit and passenger information division will total $174 million.
Vapor's door systems will complement several products manufacturered by other Mark IV subsidiaries, including electromagnetic information display systems and components made by Ferranti-Packard Electronics, traffic signals and controllers manufactured by Automatic Signal and Eagle Signal, large-scale reflective traffic displays produced by the Interstate Highway Company, and the Luminator and Luminator-Lawo-Europa divisions.
Alfiero explained that transportation-related companies like Vapor are good investments because the transit industry is recession proof.
"Domestically, the transit industry is not closely related to the economic cycle, but is dependent upon state, local and federal government funding," he said. "Significant growth is being forecast for the public transit market due tothe need to conserve energy, rebuild and expand our country's infrastructure andreduce pollution, congestion, gridlock and travel time."
Alfiero added: "Public mass transit is expected to be a beneficiary of a portion of the infrastructure allocation from the new gasoline tax." The current federal budget includes a 7 percent increase in funding for mass transit.
Outside the United States, subways, trams and buses are more a part of everyday life because of significantly higher fuel costs. Thus, "the replacement, upgrade and retrofit markets are fueling growth at an accelerated rate," Alfiero said.
Mark IV's acquisition of Vapor is its first transportation-related expansion this year. Four of the other companies are involved in audio equipment and one manufactures garden hoses.