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April 23, 2012 02:00 AM

Molder/extruder Medplast acquires United Plastics Group

Mike Verespej
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    TEMPE, Ariz.—MedPlast Inc., a molder and extruder of silicone, other rubbers and plastics, has completed the acquisition of contract manufacturer Unit- ed Plastics Group Inc.

    The deal, announced April 4, gives MedPlast the presence and plants the company said it sought in China. The manufacturer now boasts more than $250 million in sales—roughly 60 percent in medical—and 15 plants worldwide covering a combined 900,000 square feet.

    UPG has factories in Mexico and Wales, four plants in the U.S. and four more in Suzhou, China. All five of 4-year-old MedPlast's current locations are in the U.S.

    “China is a shining star for us,” said Matt Langton, UPG vice president of sales and marketing. “It is one of the most important calling cards we have,” with 175,000 square feet of manufacturing space that accounts for one-third of the firm's overall sales and 50 percent of its medical business.

    Months in the making

    Last June Mike Farrell, MedPlast executive vice president of sales and marketing, said the company wanted to make an acquisition in the next 12 months and to add its first plant outside the U.S.

    Medplast, based in Tempe, was formed by former Milacron executive Harold Faig through the purchase of two medical companies. MedPlast's medical business focuses largely on hand-held, single-use surgical instruments and diagnostic devices geared to its capabilities in silicone, other rubbers and plastic, as well as overmolding, two-shot and thermoplastic molding.

    The company has 220 presses, with clamping force sizes from 28-1,000 tons, at its plants in Tempe; Monticello, Iowa; Westfield, Pa.; Elkhorn, Wis.; and West Berlin, N.J.

    Altogether, UPG has more than 300 presses worldwide, in the 24-1,000 tons range. Medical accounts for about 40 percent of the firm's sales, and the rest is divided fairly equally among electronics, consumer and industrial products, with some custom automotive business. Medical accounted for about 85 percent of MedPlast's sales in 2011.

    The acquisition also gives MedPlast precision mold making in China and North America.

    “The combination of MedPlast and UPG represents tremendous opportunities for both firms and for our customers,” according to Faig, the company's CEO. He said the acquisition boosts the firm's position “as an integrated, one-stop supplier” in health-care and non-medical product markets.

    In addition to UPG's China presence, the other driving factor for the acquisition was the pairing of complementary technologies, said Langton. “UPG brings a wide range of value-added capabilities to the table including partial- and full-assembly, contract sterilization, lab services (and) global supply chain logistics management.”

    MedPlast's capabilities include injection molding, blow molding, silicone extrusion, compression and transfer molding, liquid injection molding, two-shot molding multicomponent molding, and precision mold making

    The acquisition continues a trend of contract manufacturers merging and making acquisitions to grow in size and gain geographic presence.

    “The two biggest drivers are that big OEMs are asking contract manufacturers to be closer to their own manufacturing locations, and that OEMs are looking to reduce their suppliers and also want suppliers that are more vertically integrated,” said Mark Bonifacio, president of Natick, Mass.-based Bonifacio Consulting Services L.L.C.

    “We will see contract manufacturing organizations emerge that have more scale and that have sales of several hundred million dollars,” according to Bonifacio.

    Faig was president and CEO of medical manufacturer Tech Group Inc. for two years after retiring as president and chief operating officer of Milacron Inc. in 2004. Last year, for example, Hudson, Wis.-based Phillips Plastics Corp. purchased medical injection molder Medisize Corp. of Vantaa, Finland, creating a $500 million company that has since been renamed Phillips-Medisize Corp.

    Another player

    Similarly, privately owned Vention Medical has transformed itself from a midsized medical-device contract manufacturer into one of the industry's largest with four acquisitions in the last three years—two of them in the last seven months, including its purchase in November of Atek Medical Group, which comprises both Atek Medical and Atek Plastics.

    Those acquisitions give Vention five plants in Costa Rica that have a total of 175,000 square feet of manufacturing space, a factory in Ireland and six facilities in the U.S.

    Since it was formed, MedPlast had added a clean room and silicone extrusion capacity to its Elkhorn plant to complement the elastomeric molding, rubber injection molding, silicone injection molding, thermoplastic molding and overmolding capabilities at that factory.

    In Tempe, it added extrusion blow molding with the capacity to make 5 million small-and-medium-sized products and a second clean room for Class 8 medical devices.

    In West Berlin, a white room was converted to a clean room that has enough space for 12-14 injection presses, increasing clean room space there to more than 60,000 square feet.

    UPG has made similar investments in clean rooms at its 10 plants.

    In the past two years, UPG has added injection molding capacity in its Tijuana, Mexico, plant, and two-shot molding in Chicopee, Mass., where another clean room is currently being installed.

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