Jensen Corp.: A fitting acquisition for Swagelok

03/01/2004

By Mark DeSorbo

NORTH TONOWANDA, N.Y.—When Jensen Fittings Corp. was sold to Swagelok Co. in January 2001, the purchase of the sanitary fitting and component maker may have been regarded in one of two ways—just another deal in the merger-acquisition trend or a transaction that allowed an autonomous life sciences-based firm to go global and a fluid components manufacturer to diversify even further.

Many companies that service other factions of the cleanroom and contamination-control industries continue to find success in the life sciences. For Swagelok and Jensen, it fueled a leveraging and broadening of fluid system component technology which, in the last three years, has proved to be quite lucrative for both parties.

"When I was independent, I didn't have the distribution system and I didn't have the resources," says Michael Sullivan, president of the former Jensen Fittings, which became Swagelok Biopharm Services Co. after the acquisition.

For Swagelok (Solon, Ohio), Jensen was naturally the most direct way to expand an existing line of pharmaceutical and biopharmaceutical products, and acquiring the western New York company only added to an existing repertoire of Swagelok markets, ranging from food and beverage production to oil and gas to petrochemical processing to semiconductor manufacturing.

"We were looking to expand our product and service offerings to end users in pharmaceutical, food, beverage and other sanitary process," says Dennis Grantham, Swagelok's manager of corporate communications. "Jensen, at the time, had some great products and a great infrastructure and that complimented a line Swagelok introduced in 1998."

While Swagelok already had a presence in the life sciences industries, it was strictly from utility side, he explains, adding that the Jensen acquisition brought Swagelok inside the proverbial cleanroom to the "high purity side."

Jensen also offered custom fitting manufacturing. The company can still turn a drawing around in four hours and the actual product in four days. That ability, Grantham says, was unique and fit nicely into a Swagelok mission to provide supplementary, value-added services to its product lines.

In addition to custom fitting manufacturing, Jensen's existing third-party validation through Purity Systems Inc. means that fittings leaving the factory are certified to comply with Food and Drug Administration current good manufacturing practices (cGMPs) and Code of Federal Regulations (CFR).

"They are in our factory, inspecting our products," notes Sullivan, who says a short-term goal is to be "heavily" involved in the standards process. "They sign off on every fitting, and every single fitting comes with documentation. It's an expensive program to operate, but we get our product into their line and they don't have to worry about have to return a faulty or substandard product."

The combination of value-added services with the technology made the acquisition a "complimentary move" Grantham says, and Sullivan agrees.

"When I was working as an independent company, I didn't have as much clout, and I was only in the United States and Canada," Sullivan explains. "Swagelok resources in engineering, metallurgy, marketing, computer services, quality assurance system, material purchases, field engineering, construction, exporting rules and compliance regulations have been big advantages."