Trey Atkins, general manager and operating partner within San Clemente, Calif.-based IRP Medical, said the initial plan is to keep the same IRP Medical branding under IPS.
"IRP Medical brand will still be in the market space, though we are only in week one of the acquisition and are still getting to know each other and how we will integrate," Atkins said. "We bring the silicone gum and LSR injection molding to the group, and this is certainly in alignment with IPS in terms of critical-to-function parts. We are looking for growth that is scalable in size, producing difficult-to-manufacture parts."
IRP Medical has three clean rooms in San Clemente, including a 40,000-sq.-ft., state-of-the-art space; an ISO 8 clean room (10,800 square feet) for injection molding and QA; and an ISO 7 room (12,800 square feet) for inspections and secondary operations. These certifications enable scalable production in the burgeoning Class I and Class II medical device spaces, Atkins said, with resources available for higher class, greater purity LSR part production as well.
"We moved to San Clemente in 2013, and we were a very small business between medical and aerospace, focusing on our existing customer base that we already had. In the beginning, we were looking for any LSR opportunities at the time," Atkins said.
Like IPS, IRP is known for employing challenging engineering in its custom parts, used in industries where components must be formed to tight tolerances—and perfection is a requirement. IRP also offers tooling for silicone molding.
According to IRP, LSR many times is the first material of choice for custom silicone molders for its excellent compliance to biomedical regulatory requirements for contact with body fluids, skin and blood, and for its use as an inert implantable inside the body. In addition, LSRs often can be used in high-volume component production.
Typical applications for high consistency rubbers are in electrical and aerospace connectors and interfacial seals, items which require air tightness in harsh environments, according to IRP.
"The other thing is they have a lot of good business content in different market segments—KDL and Mikron are very complementary to IPS, and we can easily integrate and leverage their product lines as well as their established customer relationships," McManus said.
By industry, the IRP Group acquisition will expand IPS' medical footprint; by geography, McManus said he hopes to see the combined business expand its footprint in Europe, as the North American presence is firm. IPS has a facility in Sheffield (Northern Engineering, which produces specialized O-rings and molded and extruded elastomers), and IRP Medical should benefit the company's growth on that continent.
"IRP brings capabilities that are scalable to Europe," McManus said. "Europe is a greenfield opportunity for us, from a business growth perspective. We want to grow not just to cover North America but Europe and the rest of the world."
Silicone market: Volatile once again?
As IPS and IRP are concerned with raw material pricing from both a domestic and international perspective, it is worth noting that silicone and its building blocks, the metal silicon and siloxanes, are entering another volatile pricing phase like they saw in 2018-19, according to Atkins.
Market fluctuations this time may be due to shipping bottlenecks created by the coronavirus pandemic rather than supply issues, even as demand for silicone products—especially in the medical field—continue to rise.
"It is volatile from a building block standpoint," Atkins said. "They are importing into a backlog at shipping ports and transportation hubs. COVID has played a part in this with 12-16 week lead times for raw materials from suppliers. Coming from Europe, this could be even longer."
McManus echoed this trend toward price increases in the silicone market.
"Unlike normal market fluctuations, this is not necessarily tied to that," McManus said. "Much of this is COVID-related, as demand is rising for silicone products in medical and other industries."
The bottom line is that both IPS and IRP are looking to grow, McManus said.
"From my perspective, this really is a great combination with IPS and IRP," he said. "Both have an aggressive growth trajectory, in addition to having the Arcline partnership, which recently received a second fund and has the capital to deploy. Arcline is truly a great partner to have as we grow our businesses."
Atkins added he is "excited for the next chapter."
"From the IRP medical perspective, we are excited about the potential and growth we are doing here," Atkins said. "We would like to double the size of the IRP Group. It takes talent and expertise to do this and we are very happy to be on the same team together."
Noting the bittersweet transition to new ownership, Trujillo said the same talent, expertise and discernment that drew IPS to IRP are the same ideals on which he founded IRP Group more than two decades ago.
"It took a lot of ins and outs through the years, and we ended up in certain platforms, focused on certain types of work," Trujillo said. "We hired the best, provided the best benefits and made sure we were selective in the work we chose."