BUFFALO, N.Y.—Protective Industries Inc. has acquired rubber product maker Shercon Inc. to expand its capabilities and move into the rubber product manufacturing sector.
Owned by Windjammer Capital Investors, Protective Industries, better known in the industry as Caplugs, bought Shercon because the combination of the two businesses diversifies its offerings “and significantly enhances the value we can provide to our customers,” Caplugs CEO Greg Tucholski said.
Current plans call for Caplugs to slowly bring Shercon into its fold and to fully integrate the company into its operation by January 2013, said Brad Longstreth, senior vice president of sales for Caplugs and head of the integration team.
Terms of the purchase weren't disclosed. Longstreth said Shercon, currently based in a leased facility in Cypress, Calif., and its work force of about 50 will move to Caplugs' Rancho Dominguez, Calif., plant located relatively close to Cypress. The lease in Cypress is expiring and there's ample room for Shercon's personnel at the Rancho Dominguez site.
Ultimately, Shercon will become a brand name for Caplugs' line of masking products, Longstreth said, and its management team will remain with Caplugs as will the firm's work force of 300 in China.
Broad, diverse portfolio
The acquired company produces the majority of its industrial rubber molded products at its two-building manufacturing complex in Hangzhou, China. Shercon does most of its die cutting for tapes and other goods at the Cypress site. That production will shift to Caplugs' plant in California.
Tucholski said that because of the acquisition, no other supplier can offer the broad and diverse portfolio of products to its customers that Caplugs now offers, adding that the deal brings together two leaders in the masking and protective products industries.
Buffalo-headquartered Caplugs is primarily a plastic goods processor, while Shercon specializes in rubber product manufacturing, with an emphasis on masking. Until now, Caplugs outsourced the production of silicone offerings, and that production will be shifted to Shercon.
Shercon's custom rubber molded goods include complex maskings, caps, plugs, tapes, die cut masking and niche industrial offerings for original equipment manufacturers.
Buffalo-headquartered Caplugs' premium protection products include caps, plugs, containers, edge liners, tubing, netting and masking products.
The company was formed in 1948 to produce masking products, but diversified into custom molding of higher-end goods and moved the majority of its manufacturing to China about 10 years ago.
Caplugs does injection molding, vinyl dip molding and plastic extrusion. It operates four manufacturing and distribution facilities, in Buffalo; Rancho Dominguez; Erie, Pa.; and Shanghai, China.
In Shercon, Caplugs is getting a molded goods maker with a strong production base in China. The firm opened a second building, spanning 80,000 square feet, adjacent to its factory in Hangzhou to create a manufacturing complex.
In addition to its production operation, it has a distribution center in Louisville, Ky., that ships products throughout North America.
Caplugs strength is protective products, Longstreth said, while Shercon's prime focus is on masking products, which is not presently a Caplugs core operation. “We're calling on many of the same customers,” he said, “so it works out well for both sides because we now both offer much more than we did before.”
As customers look to trim the number of their vendors, Caplugs is in a much better position than it was previously, he said.
Longstreth said that Caplugs always is looking to grow and expand, which ties in well with Windjammer's vision of its group of businesses.
Growth through acquisitions “is always a focus of the planning process with our portfolio companies,” according to Greg Bondick, managing director of Windjammer.
He said that with the purchase, Caplugs will be able to grow in a complementary market and deepen its international capabilities.
The company will continue to look for acquisition opportunities to enhance its product portfolio and capabilities, he said.