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UK investment trust buys US plastics companies

October 1, 2012

LONDON (Oct. 1, 9:15 a.m. ET) — Caledonia Investments plc has, in partnership with Nova Capital Management, purchased five companies, including plastics firms, from Wichita, Kan.-based Latshaw Enterprises Inc. for 26 million pounds ($41.9 million) in cash.

The companies include Wescon Plastics LLC, a Wichta-based custom injection molder, and Coast Wire & Plastic Tech Inc., a Carson, Calif.-based maker of custom electronic wire and cable products.

Other companies included in the deal are Wescon Products Co., MC Electronics Inc. and Anderson & Forrester Inc. The five businesses have aggregate sales of around $90 million and employ more than 450.

Equity financing for the acquisition was provided by Caledonia and Nova, with the former investing $42 million and GSO Capital Partners, part of private equity firm Blackstone, and PNC Bank providing the debt financing.

“The businesses are cash generative and our investment has been structured so as to provide a running yield from year one,” said Duncan Johnson, a portfolio manager at Caledonia.

“Along with Nova and the Latshaw team we have developed an investment strategy which will see capital value being built and realized over the medium term,” he explained.

Tom Leader, an investment partner at Nova, added: “This transaction represents our fourth deal in North America, a region in which we are continuing to see strong deal flow and are looking to increase our presence going forward.”