From news reports, it seems that Apex Tool Group was close to being sold to another company. Or at least, their parent company had attempted to sell the collection of tool brands more than a year ago.
Apex Tool Group (ATG) owns a number of tool brands, with Gearwrench and Crescent perhaps being the most widely recognized. Other ATG brands include Jacobs, Weller, and Cleco.
ATG is owned by Bain Capital, a private investment firm that owns many brands, such as Bob’s Discount Furniture and Valeo foods.
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According to news reports in mid-2021, Bain Capital was considering a sale of ATG, with the value estimated to be 2 to 2.5 billion dollars.
Later in the year, a potential buyer was identified and it was reported that:
Talks are still ongoing and other bidders remain interested in the asset, the people said.
However, in late 2021, it emerged that the potential buyer, Wanxiang Group, declined to pursue sale of the company and its tool brands. In this article, they say:
Apex’s inability to generate a material amount of earnings hampers recovery in key debt metrics, the ratings agency said in the report, adding that the owner Bain was unlikely to infuse much-needed cash so that debtholders could be made whole and Apex’s looming maturity profile could be solved.
Additional reporting came out in early 2022, with Bloomberg Law saying the sale of Apex Tool Group hit a snag over valuation.
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Apex Tool Group made big changes in recent years, essentially whittling down and consolidating their portfolio. It’s difficult to say what the motivations were, but we’ll discuss them all the same.
In 2017, ATG moved many of their tool brands under the Crescent brand name. Wiss was no longer just Wiss, it was Crescent Wiss. Lufkin became Crescent Lufkin, and similar branding changes took place across the board. All of ATG’s construction-related brands were absorbed into Crescent.
Some of Crescent’s companion brands were unchanged, such as Gearwrench, Weller (soldering tools), Cleco (fastening tools), and others.
In early 2017, news reports about ATG layoffs suggested the brand was permanently closing down their Armstrong and Allen tool brands. By 2019, the company had eliminated the iconic brands and started redirecting interested consumers to Gearwrench and Crescent.
Here is what Apex Tool Group’s portfolio looked like a few years ago.
See Also: Tool Brands: Who Owns What?
Here is what ATG’s list of tool brands looks like today. There’s Weller, Sata, Campbell, Cleco, Gearwrench, Apex, Crescent, and Jacobs.
Xcelite and Erem have been absorbed into Weller, similar to how Wiss, Lufkin, and others are now part of Crescent.
From 31 brands, there are now just 8.
These consolidations are smart moves, whether done for marketing purposes, or perhaps to neatly package the brands for potential sale in whole or in parts.
A couple of the brands seem to have been eliminated, such as Plumb. This is not unprecedented; KD Tools was fully absorbed into Gearwrench around a decade ago.
ATG’s biggest brands, Crescent and Gearwrench, have enjoyed increased visibility at major retailers, and I would think the consolidation helps with this.
Crescent tools have appeared at Home Depot the past two holiday seasons in a row, starting with promotional pliers displays. Gearwrench has also been increasingly visible at Home Depot stores since around 2021 as well.
Crescent tools are also available at Lowe’s stores, although their pliers look to be exclusive to Home Depot.
ATG’s largest consumer brands have remained active. Gearwrench recently launched new lower-priced “limited edition” tool sets, and crescent has been dipping their toes in the power tools accessory market.
Tool brand sales, acquisitions, and closures hit us by surprise a lot of the time. Were there signs that Bain Capital was looking to sell Apex Tool Group? Are they still in talks with potential buyers?
It will be interesting to see what happens over the next couple of years, and if Apex Tool Group is eventually sold or not.
Jim Felt
Predatory hedge funds at work. Think a tired variation of the 1980’s film “Wall Street” and Gordon Gecko’s most quoted line from the film. Nowhere is the goal to make a better tool or tool factory. Only a “better” return on investment. Am I too harsh?
I also wonder what lasting value these “funds” offer for society in general. We know what short term value they represent to their management team and investors. And any Presidential aspirants they’ve harbored.
I’ll wait.
eddie sky
Nailed it. I’m tired of the “private investment groups” which are predatory, greedy, individuals that exploit loopholes to profit without public share. Meanwhile coming into a company, buying it up, chopping it up (see Al Chainsaw Dunlop), and parsing away to make it “interesting” valuation for the next sucker.
Jim Felt
Yes. He was indeed a peach of a guy. Mostly by values added to his Wall Street enablers. And that wasn’t his first Freddy Krueger “management” job either.
Andrew
Technically a hedge fund is something else, but your point is well taken. Bain Capital also killed Toys R Us, and probably some other lesser known brands. The thing I don’t understand is how they keep finding “investors” (read suckers) to buy into these games. I guess part of the answer is that it’s getting harder for them.
John
Shareholder value, debt metrics, material value, credit revolvers and related terms are all part of the syntax for squeezing blood out of a turnip. There won’t be anything left of these brands except an empty shell and a a trademark that will eventually be sold to a Chinese conglomerate. It’s frustrating to see so many well known and trusted brand fall to the wayside in the name of greed.
Bob
Wow, do you work in my shop lol I can tell you they are sucking the life out of the Apex dayton plant.
Monkey
Not hedge funds, private equity funds. Big difference.
Be careful what you assume. If you have a pension right now or a pension coming your way, whether it be public or private (firefighter or accountant), chances are very high that your pension money is supporting Bain Capital and all other PE funds, and will continue to do so for the long-term.
Welcome to how the world works.
Your personal pension and your retirement health is directly attached to the success of Bain and the success of how much they can sell Apex for.
This is why you need to be an owner, as well as an employee.
Many ways to own: Have a pension, invest in the S&P 500.
Owners win, employees do not. Most people know this, so they save their money and try to own as much as possible, rather than buying backpacks for $350.
Jim Felt
You are correct.
But I was just excited to tap this out as I was (once again) so annoyed.
Andrew
Unless your pension or retirement fund is the sucker that Bain unloads this steaming pile onto. Bain only cares about Bain, and most people don’t own stocks.
Steve L
Have been sitting on the fence for flex-head ratcheting wrenches. Would be nice to have but don’t need.
GearWrench is no longer on the list if I ever decide to buy.
Stuart
Gearwrench makes great tools.
I’ve been looking for an opportunity to upgrade from the 7pc sets I bought on discount at Sears years ago, but I’d make the same purchase today under the same circumstances.
River1
Mitt Romney has or had connections to Bain
Coach James
A spokesman for Bain stated that Romney his managerial position with the company in 1999. According to FTC documents, Romney’s financial involvement ended between 2005 and 2007.
fred
It was also reported that KKR was (or maybe still is) trying to sell off the Metabo, Metabo-HPT and Hikoki brands.
My partners and I contemplated going public in order to expand. One of the partners who had an interest (in the overall business) larger than mine was gung ho. I guess he wanted to buy a better plane than the one he was flying. Cooler heads and the majority voters (car drivers rather than private plane users) prevailed, and we collectively soldiered on. In the years of my involvement, I thanked my lucky stars that we were not beholden to shareholders and Wall Street analysts.
Jim Felt
Thank you.
Champs
Are you *the* Jim Felt? I haven’t seen much of this name since Rossignol came calling.
DC
Everything going to CHina to feed their government and military machine.
JR Ramos
It’s been sad to see the demise of many of these brands that were once strong companies with fantastic products. Even in the early to mid 90s there were signs of impending downfall, though, not too long after a lot of the merging and rebranding (Crescent/Cooper/HK Porter/Wiss and all the rest grouped under the umbrella at that time). In more recent years…wow what a way to take goldmines (or potential goldmines) and ruin them in quality and then in name (naturally). I don’t think Gearwrench has any “great” tools…these days…most are mediocre or slightly better and lately they have really been putting out some questionable products as well. I always thought it was weird how the GW brand evolved in strange ways, considering their roots before purchase (I have a couple of the original ratcheting wrenches, given to us by sales reps when they were first hitting the market and they were wooing us to buy the line).
Reminds me of other debacles and falls from grace like Delta/Pentair/Porter-Cable. Nicholson and Simonds. (I’d put Jorgenson/Wilton/Shop-Vac/SK in a different category I guess).
That said, maybe some names like Erem and Xcelite could go away. The industries that needed them and celebrated them have dwindled so much that many people don’t even recognize those brands anymore or realize what quality they are/were.
Hurts to see Allen go away, and Armstrong as well, but it’s also been a very long time since they were the same quality they used to be.
These venture capitalists and disconnected executives keep making just terrible decisions – for the companies and to some degree our country – and after 40 years of that, look at us now. It’s a real shame.
Monkey
The whining on this forum is comical. You guys want your cake and want to eat it too. Nobody gets both. Learn how the world works.
You want your made in the USA Craftsman hand forged wrench to come out of Fort Worth at a retail price of $9.99? Well you can have that, as long as you are also ok with your monthly pension being half of what it currently is, and your 401K balance (which owns DeWalt and Craftsman) being half of what it is right now.
You don’t get both. You get one or the other.
Quit whining about high prices and lack of quality product. You can’t have it both ways. Learn how economies work.
fred
Many if not most tools are produced for sale to the mass market. That usually means that the manufacturer needs to meet price points determined by the needs and wants of their major customers (most often the retailers that will sell to the end users.) The retailers in turn try to know their customers, what they are willing to pay, what sells best and what meets their (and their shareholders) expectations about profitability. So, Home Depot, Lowes, Wal-Mart, Ace et. al. all have a lot to say about what a Crescent tool coming out of an Apex factory needs to cost. That marketing has clearly resulted in the production of many tools being moved to lower-cost locales – notably but not exclusively China. It not only US tool makers that have been migrating production – as you can see more EU and Japanese tool companies with items being produced in China, Taiwan, Vietnam etc. And, my take is that not everything being produced in China is of low quality – but price-points, QA/QC and specs from the company that puts its brand name on the product will have a lot to do with it.
Franco Calcagni
Fred, I agree, pretty much everything you said is dead on.
Most of us on this forum, and similar type forums are the minority.
The vast majority want a hammer or screwdriver and care mainly about the price. COO is down on the list, so are many things important to those who share views on these forums.
Here is what counts to the average person. In HD, they see a Husky tool set on special. Price is very good, they have heard of Husky before, it has a lifetime warranty, just bring it in to HD and they exchange it.
Why pay double or triple when these do the job?
So to your point, the MFR’s, the retailers, and marketing research see what average Joe American typically buys.
This has forced all MFR’s to keep up with the Jones’, which means to export MFR’ing to cheaper labor countries.
I am the first to say that those that complain about quality, we have only ourselves to blame. This is what we want…or at least, this is what we (we being the vast majority) are telling MFR’s that we want.
And I also agree that made in China can be extremely cheap, when the MFR (brand) is telling the actual MFR in China, we want “X” price point.
If 70%-80% of the market was BUYING what has now become niche market brands like Proto, Wright, what used to be Armstrong (made in the US). If the market REFUSED to buy Vise Grip copies at 25% to 50% of the price of the Peterson Vise Grips. The cheaper alternatives would be non-existent or very small, and made in the USA Vise Grips would rule.
Unfortunately, what makes the bottom line, is people and their wallets
Al
Not hand forged. Rolled on machines/tooling from Belarus. But, point is that we (I) will pay for decent quality and US-made if it makes sense.
A $55 locking plier will be wall art, not a daily driver that gets dirty with welding splatter or sewage. That seemed to be performative from Malco rather than a sustainable sellable product.
Craftsman could not overcome the manufacturing problems and threw in the towel. Was it timing demands? Or was the plan doomed for failure before Go?
I’d pay $30 for an Estwing framing hammer. More for a Trusty-Cook ball peen deadblow. $15 or less for a Vaughan.
I’d expect all of them to last 10 years, not 2 like disposable tools.
That doesn’t scale to the volume that investors want to see. That’s nit the consumers’ fault. It’s the investors’.
JR Ramos
Monkey, if that was directed at me as the reply would suggest, you’re way, way off base (toward me personally, anyway). But you have no way of knowing who you’re speaking to.
If you replied when you intended to make a new comment, ignore this. 🙂
Franco
Monkey, I agree completely; too many want, but nobody wants to pay…the result, they whine and complain. Not pointing to anyone in particular on this forum, just in general, the whiners that want everything for nothing, are everywhere.
This is a loose definition of entitlement.
Stuart
Consumer actions are measurable, but sentiments and opinions are still important.
“Whining” can provide clues as to purchase intent and tendencies.
Franco Calcagni
My point was that…example, people get all icky about “made in China” and are constantly, “I want made in the US”. Then when they get made in the US, it’s too expensive.
This is a classic or large segment example, but there are many other examples of whining for the sake of whining or maybe feeling a bit entitled?
There are definite times for whining is legit and called for also.
Monkey
Exactly. And that manufacturer also needs to meet the margin demands placed on the owner of the business that is in turn under pressure to continue to increase the value of his business and stock price so that the 401K funds and and pensions that own those companies can continue to increase the monthly payments and pensions to workers and retirees that can keep up with inflation, so that employees and retirees can continue to get their monthly checks that can afford tool backpacks that now cost $350.
So stop the whining on this forum. If you want to whine and blame, just look in the mirror for the reason for the problems.
Jared
I don’t think I understand the implications of this. Is it a good or bad thing that Bain Capital wants to sell Apex?
E.g. is this a sign that the Apex tool group is doing so poorly that Bain wants to cut and run? Or maybe it’s the opposite, and Bain feels their efforts to consolidate and streamline Apex were so successful that Apex is worth more now and Bain wants to capitalize on that. Maybe its neither and Bain is just looking to retract a bit in front a of a possible economic downturn.
Monkey
Tremendously loaded question, with a ton of complicated factors to consider. And usually nobody knows until 5 years later.
Good or bad for whom:
Bain?
The next owner of Apex?
The employees of Apex?
The retirees behind the pensions invested in Bain?
Fans of this website?
Workers that need these tools for their livelihood?
There are tons of different stakeholders involved in this, all with different objectives, many of which conflict with each other.
Many times it can be both good and bad, or impossible to know until it plays out and we see what the new owner actually does.
Pretty sure that the DeWalt acquisition of Craftsman is a great example that it’s impossible to answer your question, especially given Bain hasn’t even sold the company yet.
Jared
Fair point! In my case I was asking from the perspective of tool users since that’s the audience for this website, but I appreciate it would look different from another lens.
I was reading the comments and it seemed as though a fair number of people were disapproving or upset – e.g. there were comments about “predatory hedge funds”, “greed” and vows not to purchase from affected brands. Whether or not you’re a fan of Bain Capital’s tactics generally though, I don’t understand if this move (or attempted move) was something I should cheer or jeer.
Maybe it’s neither because, like you say, the results won’t be known until years later. However, given the general tone of the comments, I figured some folks had a negative opinion about this news and I was hoping someone would explain why.
MikeIT
Nobody thought the tools coming out of Texas were going to be cheap, the current ratchets, sockets, and wrenches from Taiwan cost more than the DIY competition. The WSJ had an article about the plant closure and they cited the failure to get the automation working properly as a big reason the plant folded. Automation was one of the big things SBD touted about the new plant as well, so hand forged wrenches were not expected either. Increased automation in manufacturing is happening all the time and it brings improved production and quality at lower costs. All around the world automation is happening so its no surprise any new factory would have high levels of automation. What was surprising was that a company as big as SBD would fail at it. This is not the main thing I wanted to address, that’s a whole other subject. I just wanted to say that I fundamentally disagree with the idea that we can have one thing OR another but not both. A quality product does not need to be expensive. Germany has many well made and reasonably priced tools available there, its the cost/tax to bring them here that makes them pricier. All manufacturers, including tool companies will eventually have to increase automation or go out of business. Adapt or die is the real lesson in economics, not that you can get one thing or another.
fred
SBD may not be on the rocks – still sit in the middle of the S&P500 – but missteps seem to be hurting them. Their stock is well underperforming their competitors and their market cap is less than half what it was 2 years ago. If the overall housing/construction market takes a downturn – recovery may be slow in coming.
Stuart
Craftsman needed 3 things for everything to work out – (1) high quality tools (2) produced at high volumes (3) to be sold at competitive consumer pricing.
Low quality tools? Fail. Insufficient volumes? Fail. Can’t reasonably match Husky, Kobalt, or similar mass-market price points? Fail.
Franco Calcagni
Fail, Fail, Fail…it is easy to say/write
In today’s economy, where employers are having trouble finding people to work, even at 50%-100% over minimum wage at places like McDonald’s and Home Depot… “(1) high quality tools (2) produced at high volumes (3) to be sold at competitive consumer pricing….is very difficult.
Even prior to COVID, I believe making in the US, while also…”reasonably match Husky, Kobalt, or similar mass-market price points”…was not possible. Today’s economy, less than not possible.
What might have happened with Craftsman in Texas, is trying to satisfy your 3 points by shaving so much on each, or mainly 1 & 3. We’ll cut a bit on quality, and we we’ll price them more than standard fare to cover labor (probably paid the lowest they could getaway with), after all, they are made in the US.
Rather than waiting for someone like Craftsman to re-invent the wheel, there are plenty of made in the US tools that can be bought now, and support these companies.
Why wait for Craftsman or anyone to make made in the US (quality), and “reasonably match Husky, Kobalt, or similar mass-market price points”…it is NOT possible.
Monkey
It’s not a sign at all that Bain wants to cut and run.
Bain wants one thing: To buy Apex at one price, and then to sell it later on at another price that equates to 20%+ IRR and/or 4.0x+ cash on cash return that Bain’s LPs (which are your pensions) are demanding out of Bain.
Bain wants nor cares about anything else.
Champs
PE firms are flippers looking to double their money with the corporate equivalent of a fresh coat of paint on the walls.
“Private Equity Firm Plans Exit” is “Dog Bites Man” type stuff.
Monkey
“Flippers”: Essentially, yes.
“Fresh Coat of Paint”: Not always.
I’m not here to defend private equity. I could give you 100 stories of destructive things they have done. But private equity is there simply to increase value. There are a lot of ways to do that:
1. Get lucky and have a strategic decide they absolutely need the asset you own, at a premium value.
2. Invest, take risks, hire people, expand, and create a bigger higher growth asset. Good things.
3. Reduce costs, and try to get away with revenue not suffering. Bad things.
4. And on and on.
It is a waste of your time to hate private equity. Private equity, and China manufacturing, are nothing more than manifestations of the American business owner and the American worker and retiree, all of which want their bag of money. And that will never change. Private equity and China are nothing more than avenues created by Americans to allow everyone to get their bag of money.
This isn’t a we versus they problem.
This isn’t a US versus China problem.
This is a we versus we problem. We created it. There’s no boogeyman in China or in the Manhattan private equity office creating this.
This is business owners (people, founders, families) and employees/retirees wanting their bag. We all created this problem, together.
And remember, ever retired police officer, fireman, teacher, city worker, etc etc that you know and love and want to be happy……90% likelihood that their financial well being is directly tied to the private equity funds you are whining about and manifested going back to the 1980s.
That is what I mean by “look in the mirror”. The sooner you can begin to understand how much everything here is intertwined and dependent upon each other, the sooner this country might start to once again have a chance at your dream of “quality tools at reasonable prices”.
But I highly doubt it. It’s shocking that this has been manifesting since the 1980s, yet most people in America still do not understand how this all works and is related. I guess we can thank tiktok and Facebook for that.
And don’t even get me started on the education system’s inability to teach this truth to the youth, even though the teachers very well being (their pension) is directly tied into everything I just mentioned.
KMR
The education system isn’t meant to teach the truth. The primary goal of the public education system is to churn out (mostly) literate individuals who are capable of completing tasks so they can that fill the majority of positions in the workforce.
John E
I feel the presence of George Carlin’s ghost in these comments.
Franco Calcagni
George Carlin was somewhat cynical, but almost always right.
ball_bearing
Bingo!
Monkey
Great points made by Jared and the others on here.
My initial comments were way too snarky, and that was unnecessary. But it doesn’t erase the the truth about the ecosystem between tool company owners, tool company employees, tool company vendors, tool consumers, tool professionals, and 401Ks and pensions that invest in tool companies both public and private. That this is all related to each other, and we in the U.S. created this ecosystem.
DeWalt made an unbelievably expensive and honest investment in trying to make it work for Craftsman made in the USA product. They tried to make it work, with $100mm of investment, not to mention $1B just for the brand rights. Not out of the goodness of the heart, but rather because they know the demand for made in the USA quality tools at reasonable prices is a massive market demand.
Unfortunately, the ecosystem we are now in, which is completely different than the ecosystem of the 1970s, no longer exists and facilitates what we all would like. Because of business owners (entrepreneurs, founding families, etc.) and because of employees. Not because of China and private equity funds.
Feel free to take your anger and frustration out on me. Its much better than taking it out on entities that are in charge of making sure your neighbors and relatives (retired firefighters, cops, teachers, etc.) can continue to receive pension checks and dividends that can at least keep up with inflation.
Matt
Being capital is a miserable cretin of a company that shoes up in absorbs all the value and spits out the bones; I know because they once owned the company I worked for him, and I grew to hate them.
BigTimeTommy
Hey look guys this is how the world works. It’s good and normal that all these companies are run by greedy sociopaths. If you observe any problems I’ll call you a whiner and tell you “hey bud welcome to the world” because I’m such a straight shooting tough guy 😉
L
Glad to see I’m not the only one who noticed that monkey flinging poop all over, hilarious how he complains about whining but wrote multiple novel length comments that you managed to sum up in two sentences .
I bet dude doesn’t even use tools for a living.
Stuart
Did Monkey digress waaaaaaaay off topic? Yes.
Pensions? Craftsman and Dewalt? The educational system? They seem to have been triggered by the story or some of the comments, it happens.
But your attacking them doesn’t contribute to the discussion either.
Monkey
Feel free to block me from further posting Stuart, but I would just make the argument that my posts have actually been very on-topic with the Apex-Bain article that was posted. This is the M&A world. Buying and selling tool companies. So even my reference to DeWalt/Craftsman remained on-topic.
Here are the different types of tool companies/brands:
1. Ones that are in the process of being sold.
2. Ones that are being positioned to eventually be sold in a couple years.
3. Ones that are still owned by founders/families/entrepreneurs and are proud to have remained that way, and intend to remain that way…..but will also eventually be sold because the next generation of family will not agree with each other, will not have the same interest level, or will simply want their bag of money for generational security.
All highly-relevant to the Apex-Bain article and all of the questions from your readers as to “is this good or bad?”.
Any tool business/brand owner reading this right now is smiling or laughing because they know the above list and dynamic is true. And they know that they need to deal with the devil (private equity) if they want generational wealth security. But they also want to protect their employees. But they cant do both.
Which is exactly what created the current Apex-Bain situation.
Stuart
You said “I’m not here to defend private equity” and then proceeded to do just that.
You are entitled to your opinions. But instead of responding to the post, you are lecturing others about their opinions.
Your essays are extremely polemical and off-topic.
Maybe you were triggered by other commentors’ critical opinions, maybe you have an agenda, or maybe you’re just trolling. Regardless, I’ve received too many complaints about this; the discussion has run its course.
Franco Calcagni
Your original story was mainly about a sale that came close to happening, but didn’t.
Did Monkey go slightly off the reservation? Maybe, just a bit, But he was also partly responding to early comments of shareholders, predatory funds or stock investors, ready to dissect and sell off smaller parts of the company.
A lot of what he talks about, is more back room or boardroom talk, but it is also very real and relevant. When we wonder what happened when a company goes under, or why a company was sold, there are typical or up-front reasons we suspect and usually are the case. But when we have trouble finding a reasonable excuse, much of what he says can be the reason, even if it is not the most apparent at the outset.
Stuart
“generational wealth security” has zero to do with the post.
In addition to being way too off-topic, they were derogatory towards others.
“The whining on this forum is comical.”
“Quit whining ”
“Learn how the world works.”
“Learn how economies work.”
“So stop the whining on this forum”
“just look in the mirror for the reason for the problems.”
“you are whining about”
There’s no room in the comments section for anyone to mock others’ opinions. Such tactics are not conducive to civil discourse.
Daniel
Apex made hard line tools for Sears in Gastonia, NC until Sears moved production overseas. Shortly thereafter the Gastonia plant closed. I assumed the loss of the Sears contract meant they were not able to continue the US production of Armstrong and Allen without the volume of sales to Sears of the Craftsman tools.
Sammy
Are the Crescent ratchets just as good as the Gearwrench?
Stuart
Generally, no – I don’t believe so.