GREENFIELD, Mass.—Schweitzer-Mauduit International Inc. plans to acquire thermoplastic polyurethane film and sheet maker Argotec L.L.C. to branch out and further diversify its holdings.
Primarily known as a producer of products for the tobacco industry, Schweitzer-Mauduit, which operates as SWM, has agreed to buy Argotec from Wind Point Partners for about $280 million. Wind Point has owned Argotec since June 2013.
The transaction is expected to close in the fourth quarter after the firms receive regulatory approval.
Argotec is a manufacturer of thermoplastic polyurethane films used in a wide range of industries and market segments, including automotive paint protection, medical, graphics, glass lamination, textiles and others.
Formed in 1988, it has two plants, an innovation center and a warehouse in Greenfield, where it is headquartered, and another production operation in Easthampton, Mass., that the company acquired when it purchased the Stevens Urethane division of JPS Elastomerics Corp., a producer of TPU films, in 2014.
SWM is making the acquisition to continue building its non-tobacco business, said Frederic Villoutreix, chairman of the board and CEO of Alpharetta, Ga.-based SWM.
Once finalized, the transaction will be the firm's fourth since it purchased DelStar Inc., a thermoplastics filtration products producer, in late 2013.
“Argotec is a highly attractive asset, and its core competencies and attributes align well with SWM,” he said. “Much like DelStar, Argotec is a technology and quality leader in resin-based rolled goods with strong competitive positions in attractive niche market segments.”
Villoutreix said the company's films are complementary to SWM's current extruded resin production capabilities and “generate attractive margins in high-value-added applications that serve diverse end markets.”
He said Argotec will become part of the firm's filtration segment, which will be renamed Advanced Materials and Structures. The chief executive said the company believes AMS can achieve net sales of nearly $300 million and adjusted operating margin in the mid-teens.
“Our AMS segment, anchored by the acquisitions of DelStar and Argotec, and enhanced by our recent bolt-on acquisitions, will have a strong foundation for continued top and bottom-line growth,” Villoutreix said.
He said the businesses are complementary from a technology perspective and in certain end markets. Argotec should benefit from SWM's global footprint, international sales capabilities, operational expertise and SWM's intention to invest in the business to create greater growth.
SWM and its subsidiaries do business in more than 90 countries and employ about 3,000 worldwide with operations in the U.S., Canada, United Kingdom, France, Russia, Spain, Luxembourg, Brazil, Poland and China, including two joint ventures.
Guy Broadbent, president and CEO of Argotec, said the company is proud of its growth under Wind Point Partners. “We will be well positioned to accelerate our growth in combination with the resources of SWM.”
Other than that, another Argotec official said, there's nothing the company can comment on at this point because the transaction is pending. He did say it was a good opportunity for the firm and believes it will be positive for Argotec and its employees going forward.