Wiring Harness News WHN Jul-Aug 2012

s i : • Merger & Acquisition Services e h s T su re Is tu • Control Panel Manufacturing Automation a • Scrap E-Waste, Environmental Standards & Certifications e F • Cadmium Replacement Coating for Military/Aerospace Connectors JULY AUGUST Military Contractor 3% Other 12% 2012 OEM 33% Distributor 9% The 2012 Electrical Wire Processing Technology Expo If you missed the 12th annual Electri- cal Wire Processing Technology (EWPT) Expo held in Milwaukee last May, you missed quite a show. Held downtown at its permanent home in the Frontier Air- lines Center, the show was host to 136 exhibitors, a 20% increase over 2011. The final attendee tally was 1848, repre- senting a 6% increase over last year's total. Attendees came from 22 different countries for this event, and hailed pre- dominantly from the OEM, Contract Manufacturing, and Assembly arenas. (see fig. 1) First held in 2000, the two day show has become the single biggest gathering of wire processing equipment manufac- turers in North America, with attendee and exhibitor growth every year. “This show has really become the starting point for decision makers in our indus- try,” boasted one exhibitor at the show. Once again, the event’s Exhibitor Advisory Committee chose an informa- tive array of free seminars. Don Price from Ford Motor Company and Rakesh Patel of the ISO Electrical Cables Com- mittee were on hand to present the lat- est on aluminum wiring, including phase-in schedules, termination technol- ogy, and technological hurdles. Next was Ruben Lozano of Lakes Precision to explore the mechanical limits of copper and aluminum wire as it is transformed from bulk wire to harness assemblies. Day one seminars concluded with Eric De Jans from Z + F USA covering crimp- ing fundamentals, material specifica- tions, proper geometries, and testing methods for turned contacts and wire ferrules. The Day 2 seminar schedule began with Lyle Fahning of the WHMA who covered the WHMA IPC/WHMA-A-620 specification for wire processing, with a heavy emphasis on the pending Revi- sion B changes. Keith Nicholas of TE Connectivity followed with his presentation on maintaining quality crimping results under extreme condi- tions. Concluding the show’s seminar schedule was Joe Porter of Grayline who provided an in-depth look at heat shrink tubing, including sizing calcula- Scrap, E-waste, and Environmental Standards and Certifications By Joe Tito Wiring Harness News _________________________________ ecently, at the EWPT Expo, I ran into several Milwaukee area salvage yard operators who were looking for tools to strip scrap wire for smelting or granulating. As you can imagine, smelting insulated wire produces many toxic gases. Capturing R these gases requires capital intensive baghouse systems, and is subject to very strict oversight from OSHA and the EPA. Curious about how wiring harness man- ufacturers handle scrap, and even if it was worthwhile studying, I sent out a query on the WHMA listserv asking just that. I got some interesting responses that I will share later. But I also became involved in a couple of conversations Assembly 20% Contract Mfgr 23% Fig. 1 tion, and material selection. The Expo has become known for its hospitality, and this year was no disap- pointment. Exhibitors were treated to a Beer-N-Brauts party sponsored by Assembly Magazine on set-up day, and an Exhibitors Breakfast sponsored by The Frontier Airlines center on Day 1. The Day 2 Exhibitors Breakfast was present- ed by Wiring Harness News. Attendees also enjoyed red-carpet treatment with a Day 1 morning break sponsored by Komax and an afternoon break held by Schafer. The spectacular After Hours VIP Party was co-sponsored by Komax and Wiring Harness News, and featured incredible buffet stations and live jazz music. The morning break for Day 2 was by Mechtrix, and WHMA provided Lobby Coffee both days. One of the signature events is always the Day 2 Bloody Mary Bar, and was provided by Mecal by Starn. This year's show was co-located with the Electrical Manufacturing & Coil Winding Expo which was held in an ________________Continued on page 12 Merger and Acquisition Services for the Wire Harness Industry Following is an interview Wiring Harness News recently had with Loren M. Smith, CEO of Blue Valley Capital about merger and acquisition services for the wire harness industry. WHN: When an entrepreneur is thinking about selling his or her busi- ness, what questions are you most fre- quently asked? Smith: Why should I pay you, or any- one else, to sell my business for me? The answer is the price you’ll get, pure and simple. A good broker will generate in a price materially above what you could achieve on you own. The difference between the price a good broker brings to the table, and what you could do on your own, will far exceed his fee ________________Continued on page 14 WHN: What if an owner is approached by someone who looks to be a good buyer, offering a really good price? Smith: This is the very worst way to sell a business. In the absence of a com- petitive process, you have no way of knowing if the price and terms are best for you. While the party contacting you might be well intentioned, and in fact a good fit for your business, the price he offers could be a fraction of your value. Loren M. Smith, CEO Blue Valley Capital WHN: How is price determined? Smith: Price is a multiple of EBITDA; (Earnings Before Interest, Taxes, Depreci- ation, and Amortization). Some factors that effect this multiple are; size (your revenue), customer concentration (per- cent of business with very few cus- tomers), your market (industry served), strength of customer relationships, and, your management team. Size: generally ________________Continued on page 10