Building a plastics powerhouse through acquisition, Nordson buying Xaloy

By Bill Bregar
Senior Staff Reporter

By Don Loepp
Editor

Published: June 4, 2012 6:00 am ET

Related to this story

Topics Mergers & Acquisitions, Machinery, Molds/Tooling

WESTLAKE, OHIO (Updated June 5, 5:25 p.m. ET) — Nordson Corp. is making another major acquisition in the plastics market, announcing June 4 that it has a deal to buy New Castle, Pa.-based Xaloy Superior Holdings Inc.

Xaloy is the largest U.S. maker of screws and barrels used by injection molders and extruders, and a major supplier of melt pumps, screen changers, cleaning ovens and water-ring pelletizers used by extruders.

Westlake, Ohio-based Nordson, a publicly traded company, said it will pay $200 million for Xaloy, subject to adjustments. The deal is scheduled to close in the third quarter.

Ron Auletta will remain as Xaloy’s president and CEO, a Nordson spokesman said.

A year ago, plastics industry observers might have said “Who’s Nordson?” in response to the company’s acquisition of Value Plastics Inc., an injection molder of single-use medical fittings in Fort Collins, Colo.

But with the Xaloy deal, Nordson becomes a big name in plastics — especially considering that just a few weeks ago it announced an agreement to buy Extrusion Dies Industries LLC, which makes flat dies and extrusion coating dies.

Nordson also is paying $200 million for EDI Holdings Inc., with the final price subject to adjustment.

Nordson will pay for both companies using its existing lines of credit.

Xaloy has operations in the United States, Germany and Thailand, and will become part of Nordson’s Adhesive Dispensing Systems segment.

“By adding this capability to our recent extrusion die product line acquisitions, Nordson now brings the industry a truly unique offering that combines the critical elements of both material flow and dispensing,” said Nordson President and CEO Michael F. Hilton, in a news release.

“This offering is analogous and complementary to the same highly successful model Nordson employs today within its hot melt adhesive dispensing product line for rigid packaging manufacturers.”

Nordson makes equipment for applying industrial liquids, adhesives, sealants and powder coatings, gas plasma and other surface-treatment equipment, for a range of consumer and industrial products.

Officials of Nordson were not available for comment beyond the news release.

Xaloy celebrated its 80th anniversary in 2009. That year the company also made a major acquisition of its own, buying Spirex Corp., its rival in nearby Youngstown, Ohio. Xaloy was already the largest maker of screws and barrels, since it had purchased New Castle Industries Inc. in 2003. The Spirex deal made it even bigger.

The company had expanded into gear pumps, screen changers, cleaning ovens and water-ring pelletizers in 2006 when it bought the extrusion business of Dynisco LLC.

Ownership of Xaloy changed hands in 2008 when Industrial Growth Partners of San Francisco bought the company from another private equity owner, Baird Capital Partners.

Nordson is buying Xaloy from IGP.

One screw industry executive, Glycon Corp. President Jeffrey Kuhman, knew Xaloy was for sale, but he thought it would go to another private equity company. Nordson is a strategic buyer, and because the company is a newcomer to screws, barrels and dies for plastics, Kuhman is eager to know what the strategy is, and if Nordson will bring any new technology to the components sector.

“We think it’s an interesting marriage,” said Kuhman.

He said Glycon, of Tecumseh, Mich., licenses its non-return valves to Xaloy, and buys barrels from the New Castle company.

At the time of the Spirex deal, Plastics News estimated that the combined Xaloy and Spirex had annual sales of about $130 million and about 730 employees.

Xaloy was born in 1929, as Industrial Research Laboratories in California, which developed a hard, wear-resistant iron-boron alloy later patented and trademarked as Xaloy. The company pioneered bimetallic barrels for the plastics industry, and expanded into screws by acquiring Flametech Corp. in 1987.

Xaloy’s plant in Asia is in Chonburi, Thailand, and its European plant is in Neckarsulm, Germany.

Nordson, which is traded on Nasdaq, posted 2011 sales of $1.2 billion and a operating profit of $316 million.


Comments

Building a plastics powerhouse through acquisition, Nordson buying Xaloy

By Bill Bregar
Senior Staff Reporter

By Don Loepp
Editor

Published: June 4, 2012 6:00 am ET

Post Your Comments


Back to story


More stories

Image

Gear pump maker Witte expands in Germany and USA

July 25, 2014 2:15 pm ET

Witte Pumps & Technology GmbH, the German maker of gear pumps for extrusion, has moved into a new headquarters factory in the Hamburg area, and the...    More

Image

Austrian mold maker seeking North American manufacturing partner

July 25, 2014 1:49 pm ET

An Austrian mold maker is looking for a manufacturing location in North America.    More

Image

Tooling Technology has new private equity owner

July 25, 2014 11:55 am ET

New York private equity firm GenNx360 Capital Partners has partnered with management to buy Tooling Technology Holdings LLC, a diversified Ohio-based ...    More

Image

Metals and plastics company NN to buy Autocam in $300 million deal

July 25, 2014 10:07 am ET

A Tennessee metals and plastics company said it has agreed to acquire auto parts supplier Autocam Corp. in a deal valued at $300 million.    More

Meredian merging with Danimer Scientific

July 24, 2014 1:59 pm ET

Bioplastics maker Meredian Inc. is merging with its sister firm, Danimer Scientific LLC.    More

Market Reports

Plastics Recyclers Data Report & Directory

This exclusive MS Excel database contains all the companies from Plastics News' ranking of top North American Recyclers and Brokers by reprocessed volume and also includes a directory with materials processes, services offered and company contact information. Data is based on primary research by PN editorial staff.

Learn more

2014 Injection Molding Industry Report

GROWTH, OPPORTUNITY IN SIGHT FOR INJECTION MOLDERS IN 2014

In the wake of the economic turbulence earlier in this decade, molders today find themselves in much better shape. Molders are gaining a competitive advantage by investing in people, equipment and seeking inroads into new markets on a global scale.

Growth in the injection molding industry is going to be driven by low financing costs and a continued move to reshore some business.

Learn more

Shale Gas Market - Analysis of North American Region

This report highlights the impact of shale-based natural gas on the North American plastics market and features an in-depth analysis of production trends in the United States during 2013 and a forecast for 2014 and beyond.

Learn more

Upcoming Plastics News Events

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

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

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

More Events