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Topics Mergers & Acquisitions, Joint Venture, Consumer Products, Electronics, Medical, Packaging, Injection Molding
Companies & Associations Nypro Inc.
Sealaska Corp. is getting out of injection molding and manufacturing, with the sale of its 51 percent stake in three facilities that it had held as joint ventures with Nypro Inc.
The facilities, which were collectively known as Nypro Kánaak, are located in Dothan, Ala.; Mount Pleasant, Iowa; and Guadalajara, Mexico.
All three plants served the healthcare, packaging and consumer electronics markets. Clinton, Mass.-based Nypro — which was recently sold to Jabil Circuit Inc. — is buying Sealaska’s stakes.
Nypro spokesman Al Cotton said the plants will continue to operate as part of Nypro.
Juneau, Alaska-based Sealaska is a Native institution owned by more than 21,000 tribal member shareholders. The company worked with Nypro to gain minority status for the joint venture to go after government and commercial contracts.
Sealaska took a majority stake in the Guadalajara plant in 2002, in Mount Pleasant in 2004 and in Dothan in 2006. The company had started in plastics in 1997 with the formation of TriQuest Corp., which later became Kánaak.
Sealaska President and CEO Chris McNeil Jr. said in a letter to shareholders that “our experience with plastics injection molding had its ups and downs. While we experienced significant losses through 2001, our strategic relationship with Nypro through the formation of Nypro Kánaak and our re-focus on consumer packaging led to successful relationships with customers like Procter & Gamble, Kraft, Clorox, Dell and many others.”
He said that a minority-owned business must be as competitive as a non-minority business. The competitive advantage must also be complemented by a business that has strong operating margins.
McNeil said that even with the supplier diversity advantage, it was difficult to compete in a less profitable, low-margin sector.
Sealaska is changing its portfolio of companies to simplify operations, improve profitability and align operating companies more closely with its core Native values, he said.
“This sale represents an opportunity to transform future earnings into cash that we can now reinvest into initiatives that are aligned with our core values, said Sealaska Chairman Albert Kookesh, in a statement.
McNeil added that the sale was made from a position of strength and will strengthen the Sealaska balance sheet.
He said Nypro Kánaak had been recognized by the National Minority Supplier Development Council as a “Corporate Plus” supplier and had received many other awards. He extended his appreciation to the employees, Nypro and customers for their efforts.