M&A not always a meeting of the minds

By Frank Esposito
Senior Staff Reporter

Published: March 21, 2013 2:19 pm ET
Updated: March 21, 2013 3:28 pm ET

M&A execs at Forum

Image By: Plastics News photos by thegallerystudio.com EGI's Larry Jutte: “The common thread for success is communication in the deal, the plan and in execution.”

Related to this story

Topics Mergers & Acquisitions, Events, Plastics News Executive Forum

TAMPA, FLA. — For expansion-minded business owners, finding the right company to buy can be a challenge. But combining the staffs of those firms also takes some work.

Manufacturing and finance veterans Terry Minnick, Rocky Butler and Larry Jutte tackled that topic at the 2013 Plastics News Executive Forum, held from March 3-6 in Tampa.

Minnick is president of Molding Business Services, an advisory firm in Florence, Mass. But prior to MBS, he owned and operated Florence-based injection molder Pro Corp. for 14 years. While at Pro, Minnick was involved in acquiring injection molders Apogee Plastic Technologies Inc. in Daytona Beach, Fla., and Presto Plastics Corp. of Stamford, Conn.

Neither deal went as well as Minnick had hoped. The Apogee deal had its own unique set of challenges.

"If the surf was up, the Apogee guys would go surfing," Minnick recalled. "And we'd go down there wearing suits. It was doomed from the beginning.

"Companies have to be somewhat similar so you can avoid huge cultural differences," he added. "You also need existing management to stay for a time."

Other keys, according to Minnick, are "to hold on to people" and to avoid the "not invented here" syndrome, where companies reject ideas that come from outside firms.

Minnick has worked to help companies overcome those types of obstacles in his career as a consultant. MBS has done 55 transactions to date, including seven last year. Three more deals are expected to close in the first quarter of 2013.

Butler has seen the impact of mergers and acquisitions as chairman and CEO of Rochester, N.Y.-based injection molder Alliance Precision Plastics Corp., and in a previous career stop in the chemicals market.

In early 2012, Alliance Precision bought the assets of injection molder Molding Dynamics Inc. in Spindale, N.C. Alliance now operates two plants in Rochester, as well as the Spindale plant and a joint venture in Mexico. The firm has annual sales of about $35 million and employs 260, not including the Mexican operation.

"You have to communicate often, so the two firms don't see each other as rivals," Butler said. "A good human resources person is key, and it's important for management to stay on. ... You have to keep the best people, no matter where they're from," he added. "And little things can be done."

When looking for acquisitions, Butler said it's also good to avoid firms where existing management includes "a strong presence" — or what Butler described as "a narcissistic SOB."

"You don't have time to deal with the mental damage that person has created," Butler said. "If a deal isn't going to work, you know it almost immediately."

Jutte has a bit of a broader perspective on the effects of M&As, having spent 24 years with auto major Honda Motor Corp. before joining auto components molder and maker Ernie Green Industries Inc. in 2012. Jutte now is president, chief operating officer and part-owner of Beavercreek, Ohio-based EGI, which was founded in 1981 by former pro football player Ernie Green.

"I watched train wrecks when someone bought a supplier to try and get in at Honda," he said. "And now EGI has made nine acquisitions in three years. They weren't huge acquisitions, but they all add to the strategic value of what we're trying to do."

Those deals include EGI's Troy, Mich.-based Florida Production Engineering injection molding unit buying Erie, Pa.-based injection molder Omni Plastics Inc. in early 2012. That deal moved EGI more into health-care and medical markets.

"The common thread for success is communication in the deal, the plan and in execution," Jutte said. "It's not always a perfect cultural fit, but you have to get to know and respect each other.

"Transparency and sharing your vision with the acquired team also are important," he added. "And you always want to meet the people who work on the shop floor."


Comments

M&A not always a meeting of the minds

By Frank Esposito
Senior Staff Reporter

Published: March 21, 2013 2:19 pm ET
Updated: March 21, 2013 3:28 pm ET

Post Your Comments


Back to story


More stories

Image

Huhtamäki selling film division

November 26, 2014 2:10 pm ET

Private equity firm Deutsche Beteiligungs AG (DBAG) will acquire the film business of Finland-based plastics packaging group Huhtamäki Oyj for 141...    More

Image

Plastics News Now: Recycling machine dispenses food for stray dogs, cats

November 26, 2014 6:00 am ET

A PET bottle recycling vending machine is providing food and water for stray dogs and cats, a plastic tire is looking to replace rubber pneumatic...    More

Image

Visteon in talks to sell its stake in Halla Visteon Climate Control JV

November 26, 2014 9:07 am ET

Visteon Corp. confirmed this morning that it is in discussions with a private equity firm to sell its stake in South Korean joint venture Halla...    More

Image

Globalization brings sizable growth, primarily in Asia

November 25, 2014 1:40 pm ET

In 1990, the year after Plastics News published our first issue, there were 33,000 injection molding machines sold worldwide. Fast forward to 2013,...    More

Image

Deal adds U.K. plant to DelStar

November 25, 2014 12:47 pm ET

Schweitzer-Mauduit International Inc. (SWM) is acquiring certain assets from the advanced wound management division of London-based Smith & Nephew plc...    More

Market Reports

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

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 billion 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

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

October 27, 2015 - October 29, 2015Plastics Financial Summit - New York - 2015

More Events