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Topics Mergers & Acquisitions, Automotive, Consumer Products, Injection Molding
GRAND RAPIDS, MICH. (Oct. 12, 2:05 p.m. ET) — Royal Technologies Corp., a Michigan-based supplier to automotive, office furniture and consumer products markets with about 250 injection molding machines, plans to buy Hi-Tech Plastics Inc., a custom molder in Mission, Texas, near the Mexico border.
Royal added a plant in Alabama three years ago to reach customers in the Southeast. The acquisition of Hi-Tech Plastics — which had worked with Royal Technologies for more than a year on some molding jobs — gives Royal a location next to Mexico, said Royal President and CEO Jim Vander Kolk.
“With the acquisition of Hi-Tech in Mission, Texas, we’ll be better positioned to serve existing customers and to pursue new business with potential customers throughout the region,” Vander Kolk said.
Royal Technologies issued a news release Oct. 10 announcing that the company had signed a letter of intent to acquire Hi-Tech Plastics.
Royal Technologies is buying Hi-Tech Plastics from its founder and CEO, Doug Bennett, who will retire. Terms were not disclosed.
“His decision to retire is basically what led us to acquiring Hi-Tech acquiring High-Tech,” Vander Kolk said in a telephone interview.
Neither company releases sales figures. But Royal Technologies is much larger, with about 250 presses ranging in clamping force from 55 to 1,800 tons and about 900 employees. Hi-Tech runs about 20 presses and employs 90 people, Vander Kolk said.
He said Royal Technologies partners with customers to design parts, and does assembly. Royal also has urethane foam molding operations.
Royal is based in Hudsonville, Mich., where it has three factories. The employee-owned company was founded in 1987.
In 2009, Royal built a factory in Cullman, Ala.
During the past year, Royal Technologies worked together with Hi-Tech Plastics to serve about five customers in the southwestern United States and Mexico, Vander Kolk said. “The alliance has helped us better serve customers in the automotive, furniture and consumer products industries, and we are very excited about how we can grow from here,” he said.
The transaction should be completed by the end of the year.
Bennett founded Hi-Tech Plastics in 1982, and the following year manufacturing began with three employees running two injection molding machines in a rented bus garage in Cambridge, Md.
According a company history, Bennett was instrumental in helping Black & Decker Inc. convert the metal boxes it was using for power tools to plastic boxes. When Black & Decker and other key customers moved their manufacturing to Mexico, and spurred by price pressure from offshore competition, Hi-Tech closed its Maryland plant and moved to the southern tip of Texas in 2006.
Hi-Tech expanded the Mission factory to support Black & Decker’s operations in nearby Reynosa, Mexico.