Post-Leever, Who Will Pull Platform’s Levers?

Not sure whom Platform Specialty Products has in mind to replace Dan Leever, but it’s not going to be an easy gig.

Leever is a second-generation PCB guy whose father, Harold, was MacDermid’s first R&D chemist and eventually led a group of employees who purchased the firm from its founder in 1959. Dan joined the firm in 1982, and became CEO in 1990. He took it private in 2007, returned the firm to profitability, then was prepared to take in public again in 2011 before scrapping the IPO and selling to Platinum.

Leever was promptly put in charge of Platinum and, since then, has been on an acquisition streak, gobbling up OMG’s printed circuit chemistry unit and Alent, which includes competitor Enthone plus solder materials maker Alpha.

Leever knows the quirks of the PCB industry through and through, having endured three major downturns and the near-complete geographical transformation of the market. His decision to retire leaves Platform in a bit of a pickle, faced with absorbing and integrating the pending acquisitions, plus turning around a debt-laded balance sheet.

Whomever they bring in — and Leever is said to be having a hand in picking his replacement — will have a company capable of best-in-class  product development but will face scrutiny from investors and analysts over the company’s finances for some time to come.

Platinum Deals Cost a Lot of Gold

The silence, as they say, surrounding the pending Platinum Specialty Products acquisitions for OMG and now Alent, has been deafening.

Could it be because it’s summer, and people aren’t paying as close attention?

Could it be because that’s how the respective companies prefer it?

We receive announcements several times a week from various folks within Alent, but they haven’t said boo about the buyout. And the folks in the industry I’ve queried about it haven’t been quick to respond either, both on the Alpha and the Enthone sides.

Platinum is aggressively buying up companies in the solder and electroplating/finishing materials space, first having bid for OMG’s PCB chemicals unit (the former Electrochemicals) and now agreeing to terms for Alent, the former Cookson metals divisions which include Enthone and Alpha.

The aggregate price tag for the various units: $2.67 billion, including assumed debt.

That will add to the debt Platinum assumed when it acquired MacDermid in 2013 for $1.8 billion. The weight of these transactions is making folks inside and outside the industry a bit cautious, as this recent statement from Moody’s indicated.

Platinum paid nearly $40 million in interest in the first quarter alone, and its operating profit for the period was just $2.2 million. The additional acquisitions will further stress a balance sheet that carried $1.4 billion in debt as of Dec. 31.

Dan Leever, the man at the helm of Platinum following its buyout of MacDermid, knows the PCB industry inside and out, but it’s unclear to me how much further they can go before running into a Viasystems-like situation.

OMG and MacDermid? OMG!

Not nearly enough attention is being paid to the pending acquisition of OMG’s electronic chemicals business by MacDermid’s parent company.

This deal will throw even more market share to MacDermid, and the big question becomes how will smaller fabs (i.e., the vast majority of the North American and European markets) handle it? Many of them already use one or the other, and will doubtlessly be affected by the merger. I can’t imagine they are looking forward to this.


No New Lessons for 2014

Here we go again! It is 2014 and I have read the obligatory half dozen or so 2013 reviews about our industry. I searched for something unique, something significant, and something that would provide me with lessons learned that would indicate a direction to better face the future. I found none.

I then proceeded to read the rash of standard prognosticator “forecasts.” And I discovered what may be the treasure among the, well, I won’t say trash, but will say banal vague sameness. It is Dr. Jennie Hwang’s “New Year Outlook.” Hwang provides a broad look at the global and local economic impacts on our industry, notes (what I consider to be) a monumental event in the IC industry, provides a valuable perspective on China today – and tomorrow, itemizes important points to consider in hardware manufacturing, touches on print and optoelectronics, forecasts a PV market upturn, touches on regulatory environments, and proposes an interesting definition for “advanced manufacturing.”

My job is done. I no longer feel the compunction to generate a forecast. Instead, I will focus on assisting innovators to commercialize their products, solving business and marketing problems, helping companies to grow globally – and locally, and building a successful future for select participants in our industry. This includes evaluating existing and future supply chain strategies.

One must remember that China may not be the lowest cost source for various global markets, but it is certainly the best positioned site for providing products to its burgeoning domestic consumer market — the world’s largest — for automotive and wireless electronics. One must also consider what the renewed interest in regionalization may mean in terms of electronic manufacturing. It may be that another adjacent or nearby location would provide the best option in terms of regulation, taxes, labor, stability and infrastructure to serve the target market. It appears to me that if this were not so, then China would not be investing in operations in Europe and Latin America.

Do you remember when drilling services thrived in America to provide low-cost accurate drilling for PTH circuit boards? One would think that some astute businessman would create something similar to help companies get into the production of HDI boards. Well, it has been done — in South Korea. In 2013 Daewon Innovation started a laser drilling service for HDI boards with eight Sumitomo systems. Daewon is also a distributor of MacDermid’s specialty chemicals used in making holes conductive and filling vias.

Can America’s spirit and ability to develop an assembly line for high tech multidiscipline manufacturing be rejuvenated? Turn on your sound and watch the complete production of a complex system with over a million parts at the rate of one every 55 minutes – in early 1941!