COPLEY TWP., Ohio—After a short hiatus, Preferred Compounding Corp. is back on the acquisition trail.
The company has purchased the assets of Valley Rubber Mixing, some machinery and its proprietary mold cleaning technology and products, sold under the trade name Glo-Mold, from a private owner, said Marc Pignataro, the company's vice president of sales and business development.
Terms of the transaction, which closed Jan. 14, were not disclosed.
Preferred also is relaunching Glo-Mold's line of mold cleaning products as GloMoldPlus. The firm said in a Feb. 20 news release that the rebranding effort is to highlight recent product improvements and Glo-Mold's positioning under the Preferred umbrella.
It is Preferred's third acquisition in a little more than three years. During that span, the Copley-headquartered firm also added a warehousing and production facility in Mexico.
A custom rubber compounder with mixing and calendering capabilities, Valley Rubber Mixing is based in Akron. Preferred did not acquire the firm's production plant, which was leased and also was located in Akron, according to Pignataro.
He said many employees at Valley Rubber Mixing will be retained, but the exact number was not released. Equipment acquired will be moved to some of Preferred's compounding facilities, but a determination has not been made as to which locations will get which machinery, he said.
However, Pignataro said the company plans to move the GloMoldPlus product production operation to its plant in Barberton, Ohio.
"Valley Rubber Mixing is a nice bolt-on acquisition," Ken Bloom, CEO and president of Copley-based Preferred, said in a statement.
He said the purchase will broaden the company's customer base and give it new markets for potential growth. The addition of the GloMoldPlus proprietary mold cleaning technology also adds to the firm's product portfolio.
"We feel our commercial channels will help grow the Glo-Mold business significantly," Bloom said.
He added that the firm plans to work closely with Valley Rubber Mixing customers to assure a smooth transition.
Preferred has been successful with the acquisitions and additions it has made in the last three years, Pignataro said, while at the same time it has continued to experience solid organic growth.
Currently, the company, which is owned by members of the firm's management team and Audax Private Equity, operates production facilities in Barberton and Wadsworth, Ohio, along with sites in Wisconsin, Georgia, Tennessee and Mexico.
Preferred added the Whitewater, Wis., plant when it acquired rubber compounder Trostel Ltd. in 2016, and the Wadsworth factory became part of its fold in 2017 when Preferred bought Kleen Polymers Inc., a custom rubber compounder specializing in non-black elastomeric compounds.
Both acquisitions expanded Preferred's mixing capabilities, the company said.
In addition to buying Trostel's compounding business, Preferred also purchased the firm's parts molding operation. In December 2017 it sold the molded products business, based in Lake Geneva, Wis., to ParkOhio but retained the mixing operation. The latter is now called Preferred Compounding Whitewater.
Included in the sale of the molded products operation were manufacturing plants in Reynosa, Mexico, and McAllen, Texas, along with the facility in Lake Geneva, which serves as the technical center for the business.
Pignataro said Preferred sold the molded products business "because our focus is on elastomer compounding. It may have been perceived that we were potentially competing with some of our molding customers if we would have continued to operate that business."
Other key moves made in 2016 included adding another compounding and warehousing facility that spans 57,000 square feet adjacent to the company's mixing plant in San Luis Potosi, Mexico; purchasing a new F-270 mixer for its mixing facility in Huntington, Tenn.; and leasing a new headquarters in Copley, freeing up space at its Barberton compounding plant, where it was previously based.
Preferred added the building in San Luis Potosi because additional space was needed to handle the company's continuing growth, Bloom said at the time. The firm's original plant had been expanded three times since Preferred purchased it in 2012.