By: Michael Lauzon
June 2, 2014
Myers Industries Inc. plans to boost its stake in plastic fuel tanks in an acquisition of Scepter Corp. and Scepter Manufacturing LLC.
Meanwhile, Myers also is looking to sell its lawn and garden business segment.
Myers already rotationally molds fuel tanks for marine, recreational vehicle and industrial markets. Scepter blow molds fuel tanks for marine, consumer, military and industrial markets.
Myers said the Scepter acquisition, announced June 2, will expand its materials handling segment, which now injection molds plastic reusable containers, pallets, bins, totes, beverage crates and bulk containers. Scepter also makes materials handling products include crates, recycling containers, ammunition boxes and similar items.
Other plastic goods that Scepter molds include rain barrels, vehicle trunk storage aids, portable auto ramps and oil extraction systems for small engines.
Myers plans to keep its existing Ameri-Kart fuel tank business in its engineered products segment. Scepter’s operations, including blow molding, will be part of Myers’ materials handling segment because its materials handling production is bigger than its fuel tanks business, a Myers spokeswoman explained in a phone interview.
Scepter Corp. is headquartered in Toronto. Scepter Manufacturing of Miami, Okla., was the former Blitz USA Inc. fuel tank facility, which Scepter acquired in 2012. Myers in based in Akron, Ohio.
“The addition of Scepter is anticipated to provide Myers Industries with the opportunity to expand upon our leadership position in the material handling segment, broaden our product offering and better position us for long-term growth in new markets,” noted Myers President and CEO John Orr in a news release.
Myers expects to complete the Scepter purchase by June 30. It agreed to pay $165 million for Scepter, which had sales of about $100 million last year.
Scepter will lift Myers’ materials handling sales by about 30 percent. For the first quarter of 2014, Myers’ materials handling segment logged sales of $90.6 million, up 13 percent from the same period in 2013. Adjusted income before taxes was up 10 percent to $10.9 million.
Myers stated in a news release that the timing is right to sell its lawn and garden segment. A spokeswoman said the timing relates to Myers completing a restructuring of the business, which saw Myers close plants last year in Waco, Texas, and Brantford, Ontario. It also opened a plant in Sparks, Nev., and moved some production to Middlefield, Ohio. The company will focus on core businesses and treat the lawn and garden segment as discontinued in future financial reports. Investment bank William Blair & Co. will help Myers find a buyer, which could take a year.
Orr said the lawn and garden segment “has the greatest opportunity as part of an organization that is strategically focused on its primary markets for future growth.” The division includes injection molding of planters and pots.
The segment’s sales fell 18 percent to $49.8 million in the first quarter. The company reported a loss before taxes of $100,000, compared to adjusted income before taxes of $2.7 million in the same quarter in 2013. Myers blamed the loss on poor weather and problems in the segment’s restructuring.
Myers said it still expects to save $13 million annually from the restructuring.