CRANSTON, R.I.—Mearthane Products Corp., a manufacturer of customized polyurethane components, completed the acquisition of Elmco Tool Inc., bringing in capabilities to improve the company's competitiveness and speed, said Pete Kaczmarek, president and CEO of MPC.
MPC is keeping on all of Elmco's fewer than 10 employees, and Elmco's Bristol, R.I., facility will remain operational, Kaczmarek said. Transaction details were not disclosed.
Elmco is a supplier of precision computer numerical control and machining services, especially for defense applications, which is one of the reasons the company was attractive to MPC, Kaczmarek said.
"They have their own very stable revenue stream, most of it in defense-related applications. That's an area we felt and still feel is going to see some decent growth over the next few years, particularly in the naval space," he said. "We felt that on its own, even without the synergies we would see, Elmco had a good future from that perspective."
Elmco is also adept at quickly turning around prototypes and small part production orders of high-precision machined parts to mill specs, which was another reason it was attractive to MPC, Kaczmarek said.
"That was something that had good value to it and that customers value it highly," he said. "We felt their ability to very quickly turn things around and work in both metals and plastics machining, which is not always straightforward, was a good fit."
Cranston-based MPC and Elmco began talking seriously about the acquisition in April, and completed the deal at the end of September. Elmco was established in 1977 by the father and son team of Gordon and Steve Elmslie. Lori Elmslie, Steve's wife, inherited the business after his death. Although she was very active in the business, she was looking for a good home for it, Kaczmarek said. Lori has elected to retire.
MPC has moved forward on integration quickly, and will be keeping the Elmco name, partially because it already has a good reputation within the defense market niche, Kaczmarek said. Also, preserving the name makes it easier for customers to avoid having to change paperwork and approved vendor lists.
MPC has plans to grow Elmco organically through the market, by meeting with the customer base and finding what other products or services can be provided, such as painting or high-precision welding, he said.
"We're also thinking that it could be a good platform for additional add-on acquisitions," Kaczmarek said. "We feel like in the New England area, particularly southern New England, there are a lot of small to medium-sized machine businesses like this that could create the ability to have an add-on strategy."
Growth through acquisition likely will continue for MPC in the near term, with at least one more acquisition currently in the works, Kaczmarek said.
"It's a little too early to say it's a certainty. But we've certainly been active, and we think there's a lot of opportunity in this area," he said.