Custom injection molder Plastic Components Inc. has made another acquisition, buying Sports Molding L.L.C. of Clearfield, Utah.
The deal is the second for Germantown, Wis.-based PCI since it was purchased by Morgenthaler Private Equity in 2017. Terms were not disclosed.
PCI CEO Derrill Rice said SMI and PCI have "almost zero" customers in common. In an email to Plastics News, he highlighted geography, technology and end markets as features that made SMI an attractive acquisition candidate.
"They have full-service manufacturing capabilities and will be a very welcome addition to the PCI family. We are looking forward to working together to support growth with the current and valued customer base, target new customers, expand our presence in the western U.S., and enhance our product and service offerings with SMI's unique capabilities," Rice said.
For technology, he listed SMI's experience processing flexible and other specialty materials, plus its advanced color replication, gas-assist molding, insert and over molding and secondary operations.
SMI is known for processing a wide variety elastomeric resins, including thermoplastic elastomers, polyurethanes, thermoplastic vulcanizates and flexible PVC. Its key end markets include medical, industrial, recreational, eyewear and consumer.
PCI is well known for its fully automated, lights-out injection molding plant on Bunsen Drive in Germantown, one of the industry's most advanced facilities.
"Our lights-out facility continues to be a flagship for the family of PCI companies," Rice said. "We are expanding our focus on automation with the formation of an automation engineering team to drive our platform forward, to implement next generation automation technology, and to share best practices across our company portfolio."
PCI was Plastics News' Processor of the Year in 2008.
SMI CEO Shane Cave highlighted robotics as an area where the Utah operation will benefit.
"Looking forward, PCI brings automation capabilities and operational expertise to our rapidly growing business," Cave said in a news release. "Our teams have a cohesive cultural alignment that will help drive growth in customer relationships, employee development, operational excellence, and commitment to reliable product quality."
The seller is Sage Park Inc., a Franklin, Tenn.-based investment firm that bought SMI Molding in 2017. Cave and several members of the SMI management team partnered on the deal, according to PCI.
SMI is ISO 9001:2015 certified and was founded in May 1981. It owes its name to its original business, molding ski poles and goggles for two customers in the ski and motorcycle industries. It saw rapid growth and quickly diversified into custom molding.
Today the company has a 62,000-square-foot factory and 29 injection presses ranging in size from 55-450 tons of clamping force. SMI has 79 full-time employees and 22 temporary workers, Rice said.
Plastics News estimates SMI's sales at $17 million, and PCI's at $60 million.
Rice said SMI's current team "is strong and capable and the platform is positioned to scale for continued growth."
SMI was Sage Park's only plastics holding. David Evatz, managing director of Chicago-based Stout Investment Banking, represented SMI and Sage Park in the transaction.
"M&A activity within the plastics industry has increased significantly in 2021 due to a number of converging factors, including COVID-19 related pent-up demand and supply from buyers and sellers, improved performance within many plastics segments, and potential capital gains increases in 2022," Evatz told Plastics News.
Rice agreed, adding: "The M&A market is very active. We are always looking for potential partners that can expand our solution portfolio for our customers."
PCI has plants in Germantown and Cary, N.C., the latter coming from its last acquisition, in 2019, of Syracuse Plastics of North Carolina Inc. At the time of that deal, SPNC had 17 injection presses and 50 employees.
Rice said his outlook for the rest of 2021 is "very positive, but challenged by resin supply and talent issues."
"Resin continues to be an amazing challenge. Customers are scrambling to qualify alternate materials, which consumes press time in our plants and engineering time in our engineering teams," Rice said.
"Order deliver information is always suspect and you do not schedule a press until the resin is actually on the dock. Unfortunately, we do not see a light at the end of this tunnel … yet."