French buyer backs out, Tarheel Plastics shuts down

By Michael Lauzon
Correspondent

Published: October 7, 2013 5:37 pm ET
Updated: October 7, 2013 5:39 pm ET

Related to this story

Topics Mergers & Acquisitions, Appliances, Injection Molding

A custom injection molder in North Carolina has closed after a French firm decided not to buy it.

Tarheel Plastics LLC in Lexington closed Oct. 3, employees told a government agency.

“We started to get traffic [from former Tarheel employees] on Oct. 4,” said Charles Diggs, manager of the state’s department of commerce’s Workforce Solutions division in Davidson County. “They said the company went down [Oct. 3].”

“We had no indication this would happen,” Diggs added in an Oct. 7 phone interview.

IP3 of Lyon, France, originally said in a Sept. 7 news release that it was interested in buying the Lexington facility. It subsequently changed its mind.

“As from the 1st October, IP3 has withdrawn from the Tarheel acquisition due to revelations in the due diligence process,” IP3 stated on its website on Oct. 7.

Tarheel early this year had expansion plans before it agreed to be bought by IP3. In early March it said it wanted to set up a second plant in North Carolina and chose Mockville as the site. It wanted to invest about $2.5 million to $3.5 million in the second facility, according to the Sept. 7news release from the Davie County Economic Development Commission.

“The new facility is needed because the company’s current 110,000-square-foot manufacturing facility in Lexington is at capacity with 62 full-time and eight part-time employees,” stated Tarheel vice president of operations Craig Ward in the September news release for the Mockville plant. Tarheel was to occupy an existing building that had been vacant for several years. The project was to be aided by a $480,000 Building Reuse Grant from the North Carolina Rural Center.

In late September, Tarheel vice president of sales and marketing Dan Scott said in a phone interview that Tarheel had abandoned the Mockville project. An attempt to reach Tarheel officials on Oct. 7 was unsuccessful when no one would answer the company’s phone.

“We were planning for new business,” Scott explained in late September. “But in the long term, the [Mockville] business would not be sustainable.”

Following the Sept. 7 announcement of the Tarheel acquisition plan, IP3 officials declined to discuss the proposed deal despite several attempts by Plastics News to get comment by phone and email.

On Sept. 26, IP3 vice president for North America Frank Mooring said in an email that he was at Tarheel for a final review of the proposal, but he needed more time before he could respond to questions. He was unavailable following the Oct. 7 statement that IP3 withdrew from the proposed deal.

Tarheel supplied automotive, electrical, electronic and construction customers. Its capabilities included multishot and insert injection molding, in-mold decoration, gas assist molding, ultrasonic welding, painting and reusable packaging.

In IP3’s initial announcement in early September that it was pursuing Tarheel it stated that Tarheel’s customers included appliance firms such as Electrolux and Frigidaire. Other products included pool filters, auto parts, electronic components and consumer goods. IP3 said Tarheel had 32 injection presses ranging from 40 to 1,450 tons in its 110,000-square-foot Lexington plant. Tarheel’s chief financial officer at the time, Joe Nelson, stated in the release that Tarheel would provide an entry into appliances for IP3 as well as offer it the southeast U.S. market.

IP3 says in a mission statement on its website that it aims to be global with operations in America, Europe and Asia by 2015. Now it lists operations outside France in Querétaro, Mexico and Bydgoszcz, Poland. IP3 said its development partner is CD Engineering of La Roche-sur-Yon, France, which has 25 engineers and technicians designing plastic and other industrial parts.

IP3 says its major markets are automotive, household, electrical, heating and bearings.

Estimates for Tarheel’s employment in Lexington ranged from about 70 up to about 100 according to North Carolina government sources.

Tarheel was formed in 2009 and in that year purchased the Lexington operation formerly run by now-defunct custom injection molder Moll Industries Inc.


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French buyer backs out, Tarheel Plastics shuts down

By Michael Lauzon
Correspondent

Published: October 7, 2013 5:37 pm ET
Updated: October 7, 2013 5:39 pm ET

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