UPG acquisition gives MedPlast added size, capabilities and China plants

Mike Verespej

Published: April 4, 2012 6:00 am ET

Related to this story

Topics Mergers & Acquisitions, Medical, Injection Molding, Molds/Tooling

TEMPE, ARIZ. (April 4, 11:55 p.m. ET) — MedPlast Inc., a 4-year-old medical molder and contract manufacturer, has finalized a long-rumored acquisition of contract manufacturer United Plastics Group Inc.

The deal, announced April 4, gives MedPlast the presence and plants it sought in China and creates a company with more than $250 million in sales — roughly 60 percent of them in medical — and 15 plants worldwide with a combined 900,000 square feet.

UPG has plants in Mexico and Wales, four plants in the U.S. and four plants in Suzhou, China. All five of MedPlast’s current locations are in the U.S.

China is a shining star for us,” said Matt Langton, UPG vice president of sales and marketing. “It is one of the most important calling cards we have,” with 175,000 square feet of manufacturing space that accounts for one-third of the firm’s overall sales and 50 percent of its medical business.

Just last June, Mike Farrell, MedPlast’s executive vice president of sales and marketing, said the company wanted to make an acquisition in the next 12 months and to add its first plant outside the United States. In January, rumors began about a deal between the firms. Insiders said MedPlast had received more than seven bids from potential buyers, and the deal had been sealed in late December.

Medplast, based in Tempe, Ariz., was formed four years ago by former Milacron executive Harold Faig through the purchase of two medical companies. MedPlast’s medical business focuses largely on hand-held, single-use surgical instruments and diagnostic devices geared to its capabilities in rubber, plastic and silicone — as well as overmolding, two-shot and thermoplastic molding.

The company has a total of 220 presses, from 28-1,000 tons, at five plants, in Tempe; Monticello, Iowa; Westfield, Pa.; Elkhorn, Wis.; West Berlin, N.J.

Altogether, UPG has more than 300 presses worldwide, in clamping force sizes of 24-1,000 tons. Medical accounts for roughly 40 percent of the firm’s sales; the rest is about equally divided among electronics, consumer and industrial products, with some custom automotive business. Medical accounted for roughly 85 percent of MedPlast’s sales in 2011.

The acquisition also gives MedPlast precision mold making in China and North America.

“The combination of MedPlast and UPG represents tremendous opportunities for both firms and for our customers,” MedPlast CEO Harold Faig said in a statement. He said the acquisition boosts the firm’s position “as an integrated, one-stop supplier” in health-care and non-medical product markets.

In addition to UPG’s China presence, the other driving factor for the acquisition was the pairing of complementary technologies, said Langton. “UPG brings a wide range of value-added capabilities to the table including partial- and full-assembly, contract sterilization, lab services [and] global supply chain logistics management.”

MedPlast’s capabilities include injection molding, blow molding, silicone extrusion, compression and transfer molding, liquid injection molding, two-shot molding multicomponent molding and precision mold making

The acquisition continues a trend of contract manufacturers merging and making acquisitions to grow in size and gain geographic presence.

“The two biggest drivers are that big OEMs are asking contract manufacturers to be closer to their own manufacturing locations, and that OEMs are looking to reduce their suppliers and also want suppliers that are more vertically integrated,” said Mark Bonifacio,  president of Natick, Mass.-based Bonifacio Consulting Services LLC. “We will see contract manufacturing organizations emerge that have more scale and that have sales of several hundred million dollars.”

Faig was president and CEO of medical manufacturer Tech Group Inc. for two years after retiring as president and chief operating officer of Milacron Inc. in 2004.Last year, for example, Hudson, Wis.-based Phillips Plastics Corp. purchased medical injection molder Medisize Corp. of Vantaa, Finland, creating a $500 million company that has since been renamed Phillips-Medisize Corp.

Similarly, privately owned Vention Medical has transformed itself from a midsized medical-device contract manufacturer into one of the industry’s largest with four acquisitions in the last three years — two of them in the last seven months, including its acquisition in November of Atek Medical Group, which comprises both Atek Medical and Atek Plastics.

Those acquisitions give Vention five plants in Costa Rica that have a total of 175,000 square feet of manufacturing space, a plant in Ireland and six plants in the U.S.

Since it was formed, MedPlast had added a clean room and silicone extrusion capacity to its Elkhorn plant to complement the elastomeric molding, rubber injection molding, silicone injection molding, thermoplastic molding and overmolding capabilities at that plant.

In Tempe, it added extrusion blow molding with the capacity to make 5 million small-and-medium-sized and a second clean room for Class 8 medical devices.

In West Berlin, a white room was converted to a clean room that has enough space for 12-14 injection presses, increasing clean room space there to more than 60,000 square feet.

MedPlast’s medical business focuses largely on hand-held, single-use surgical instruments and diagnostic devices geared to its capabilities in rubber, plastic and silicone—as well as overmolding, two-shot and thermoplastic molding.

UPG has made similar investments in clean rooms at its 10 plants.

In addition, in the past two years, it has added injection molding capacity in its Tijuana, Mexico, plant, and two-shoot molding in Chicopee, Mass., where another clean room is currently being put in place.

Its other plants in the U.S. are in Fremont, Calif., which has a clean room that supports medical customers requiring disposable or fluid path applications; Minneapolis, which added a white room for medical diagnostic devices in 2010, and Houston.


Comments

UPG acquisition gives MedPlast added size, capabilities and China plants

Mike Verespej

Published: April 4, 2012 6:00 am ET

Post Your Comments


Back to story


More stories

Image

Deal puts Convergence Packaging under Comar's umbrella

October 24, 2014 2:00 pm ET

Convergence Packaging Holdings LLC, itself a product of mergers, now is joining together with Comar LLC.    More

Image

Akro-Plastic buying German subsidiary from Metabolix

October 24, 2014 3:32 pm ET

Akro-Plastic GmbH, a Niederzissen, Germany-based plastic compounder, has purchased the assets of Metabolix Inc.'s subsidiary in Germany.    More

Image

Gerresheimer opens first development center in China

October 24, 2014 1:34 pm ET

Medical molder Gerresheimer AG has launched a development center for medical plastic systems in Dongguan, China.    More

Image

SRG opens second China auto parts factory

October 24, 2014 11:25 am ET

U.S. automotive supplier SRG Global Inc. said Oct. 23 it is opening its second plant in China, an injection molding, plating and painting facility in ...    More

Blow mold maker adding laser cladding

October 24, 2014 10:26 am ET

Blow molds need to be strengthened at points that wear, and an official of Canadian blow mold maker Garrtech Inc. said laser cladding can replace stan...    More

Market Reports

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Plastics in Mexico - State of the Industry Report

This report analyzes the $20 million dollar plastics industry in Mexico including sales of machinery & equipment, resins and finished products.

Our analysts provide insight on business trends, foreign investment, top end markets and plastics processing activity. The report also provides important data on exports, production, employment and value of plastics products manufactured.

Learn more

Plastics Caps & Closures Market Report

The annual recap of top trends and future outlook for the plastics caps & closures market features interviews with industry thought leaders and Bill Wood’s economic forecast of trends in growing end markets. You will also gain insight on trends in caps design, materials, machinery, molds & tooling and reviews of mergers & acquisitions.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

More Events