SOUTH BEND, Ind.—Royal Adhesives & Sealants L.L.C. has acquired the stock of Adhesive Systems Inc., a manufacturer of cyanoacrylate, methyl methacrylate, epoxy and anaerobic adhesives for assembly applications.
ASI, based in Frankfort, Ill., was founded 25 years ago and serves a variety of industries, such as automotive, aerospace/aviation, medical equipment, military, electronics, general industrial, appliances, plastics molding, furniture manufacturing and filtration.
Royal confirmed the acquisition in a Jan. 4 news release, which added that ASI's founders—President Ed Koziol and Vice President Gary Johnson—will continue to run the business as part of Royal.
ASI employs 68 people at its 30,000-sq.-ft. facility in Frankfort.
The addition gives Royal its 16th facility worldwide, with 10 others in the U.S., one in Canada, three in Europe and one in China.
Royal Adhesives CEO Ted Clark said ASI targets smaller sub-contractors and suppliers to bigger original equipment manufacturers, while Royal's main customer base consists of larger OEMs.
“They fit the bill,” Clark said. “We already had some methyl methacrylate technology, but they clearly build on our theme of building a more customer solution type of portfolio of products. If we visit a customer now, we have polyurethane, epoxy, methyl methacrylate and hybrids of that group of technologies as well.
“We're positioning ourselves well to be a solutions provider to our key customer base out there in the transportation assembly markets.”
Clark said ASI's developed distributor base was an attractive element in the acquisition. ASI employs a team of people to train and develop their distributors in a specific targeted market segment.
The executive added that ASI's strong distributor-oriented approach was something Royal was lacking and that the company intends to support and build from.
Clark said ASI already was taking its model into South America and has a series of distributors in Mexico.
Royal is considering bringing ASI's method into Europe.
“They're applying the same strategy they had in North America to that region,” Clark said. “With our presence in Europe, we think we can help them do the same in Europe as well.”
Koziol said in a statement that Royal was in the best position to help the firm accelerate its growth strategy through the addition of other adhesive technologies to its product line and through the support of ASI's geographic expansion plans.
“We are very pleased to partner with Royal, which has significant global capability and experience in the adhesives and sealants industry,” Johnson said in a statement. “Royal has been aggressively growing their business and will help us to develop and grow our unique and innovative assembly adhesive business model.”
Royal Adhesives & Sealants is a global developer and manufacturer of high-performance adhesives and sealants. Headquartered in South Bend, the firm serves the aerospace and defense, construction, specialty packaging, automotive and industrial markets.
American Securities, a U.S. private equity firm with about $15 billion under management, acquired Royal in 2015. The firm is based in New York with an office in Shanghai. It invests in North American companies with annual revenues ranging from $200 million to $2 billion and $50 million to $200 million of EBITDA.