FINDLAY, Ohio—Biltrite Industries´ pending purchase of Hercules Tire & Rubber Co.´s custom mixing business will give Biltrite its first U.S. production base and allow Hercules to concentrate on its tire business.
"Our business is 94 percent tires and only 6 percent rubber, and Biltrite´s business is 100 percent custom mix rubber," said Larry Seawell, Hercules senior vice president. "It´s a perfect match for both of us."
Both sides expect the deal to close by late April or early May. The sale will include Hercules´ 150,000-sq.-ft. plant in Findlay and all equipment. No terms were disclosed.
When completed, the acquisition will boost Toronto-based Biltrite´s capacity by more than 50 percent, according to CEO Marvin Sherkin, who declined to give exact capacity figures. "It´s our first venture into the U.S. and buying a factory," Sherkin said. "We haven´t expanded from a one-plant facility. It you don´t expand or go further, you´re not going to be a long-term player in custom mixing."
The Biltrite CEO said it was known Hercules had put the custom rubber mix business up for sale, and the Canadian firm approached Hercules. Biltrite had been exploring how best to establish a U.S. presence, and this deal turned out to be the best opportunity to do so.
"It´s a good fit for us," Sherkin said. "We have very few shared customers, so this will give us a chance to branch out into new areas." Some areas, he added, where Hercules has expertise include EPDM and polyisoprene polymers.
While Hercules wanted to focus solely on its tire wholesale business, it´s not that the custom mix business was floundering. Far from it in fact.
Since Hercules sold its tread rubber business to Cooper Tire & Rubber Co. in 2001, sales by Hercules´ custom mix unit soared by 350 percent and employment more than doubled to 48 from 21. Biltrite is expected to offer continued employment to all the Findlay plant workers. "It was a strategic decision to spend all of our focus and effort on tires," Seawell said. "That´s what we know how to do."
Hercules will reinvest sales proceeds into tire operations and keep its corporate offices at its present site under lease from Biltrite for up to three years.