Mexichem buys HDPE pipe extruder Dura-Line Corp.

By Stephen Downer
Correspondent

Published: August 18, 2014 2:05 pm ET
Updated: August 22, 2014 12:19 pm ET

Related to this story

Topics Mergers & Acquisitions, Construction, Electrical/conduit, Extrusion, Pipe/Profile/Tubing

UPDATED Aug. 22, 2014

MEXICO CITY — PVC pipe and specialty chemicals maker Mexichem SAB de CV said it has agreed to buy Dura-Line Corp., a prominent manufacturer of high density polyethylene conduit, duct and pressure pipe for telecommunications and data communications, from CHS Capital for $630 million.

Antonio Carrillo Rule, Mexichem’s managing director, said Aug. 22 that the Dura-Line deal should be approved in September.

“We think Dura-Line will be our springboard into the United States,” he said in a news conference in Mexico City. Speaking in Spanish, he added that Mexichem’s strategy for all its businesses in the foreseeable future is consolidation. “Our focus is not to seek more acquisitions, although we don’t want to close the door entirely.”

Dura-Line specializes in making conduit for fiber-optic materials. Customers include AT&T and Google, he said.

He added that India, where Dura-Line operates several plants, “is a large market that is underdeveloped. We think it’s a great moment to enter India, not only as regards pipe but all segments of the market.”

Talks between Mexichem and CHS began about three months ago after an approach from the Mexican company, said Tanya Kanczuzewski, a spokeswoman for Dura-Line.

“Dura-Line was not for sale,” she said. “There were ongoing talks and discussions on business opportunities which led to Mexichem reaching out about a possible acquisition.”

The acquisition was Mexichem’s second major foray into international markets in August. On Aug. 5 it agreed to buy German PVC paste producer Vestolit GmbH from investment company Strategic Value Partners LLC (SVP Global) for 219 million euros ($293 million).

Dura-Line, which employs 1,500, is one of the largest plastic pipe extruders in North America, according to Plastics News’ rankings. Based in Knoxville, Tenn., it supplies the energy and infrastructure industries, in addition to the telecom and data communications sectors. It has manufacturing operations in the United States, Mexico, South Africa, India, Oman, Dubai and the Czech Republic.

Kanczuzewski said 75 percent of its business is “based in the U.S.”

In Mexico, Dura-Line has manufacturing operations in Querétaro and San Luis Potosí, whereas in India it has plants in Goa, Mumbai, Neemrana and New Delhi.

The company posted 2013 sales of $630 million, including North American pipe sales of $475 million, according to PN’s recent ranking.

Dura-Line’s international footprint will allow Mexichem to “increase penetration in key markets, and will also provide a platform for growth in new geographies for all of Mexichem’s products,” Carrillo said in a statement posted on the Mexican Stock Exchange.

CHS Capital is based in Chicago. The private equity firm bought Dura-Line from Boston-based equity company Audax Group in 2012. Shortly after finalizing that deal, Dura-Line bought Polypipe Holdings Inc. of Gainsville, Texas.

The company has continued to pursue growth under CHS. Earlier this year, Dura-Line announced plans to spend $10 million on technology and infrastructure that will increase capacity at three of its 11 U.S. plants, in Gainesville and Midland, Texas, and Elyria, Ohio. The technology upgrade includes extruders, gravimetric controls, monitoring systems and automation.

Speaking briefly to Plastics News in English after the news conference, Carrillo said: “We see growth in the United States. We believe it’s a growth market in the two sectors in which we are strong, telecommunications and energy. There are still opportunities for Mexichem” in the United States.

Explaining his earlier comments about Mexichem not seeking more acquisitions for the moment, he said the Mexichem board wants to reduce the company’s debt.

When it was pointed out to him that the Dura-Line deal came out of the blue — “it was a fast deal,” he conceded — he replied that “I don’t think you should expect any big surprises” in the near future.


Comments

Mexichem buys HDPE pipe extruder Dura-Line Corp.

By Stephen Downer
Correspondent

Published: August 18, 2014 2:05 pm ET
Updated: August 22, 2014 12:19 pm ET

Post Your Comments


Back to story


More stories

Image

Delphi buying connector maker Antaya

September 22, 2014 2:25 pm ET

Delphi Automotive plc will buy Antaya Technologies Corp., a Rhode Island company that supplies wire harnesses and other technologies that connect...    More

Image

New medical firm buys Clairson Plastics

September 19, 2014 4:33 pm ET

Custom injection molder Clairson Plastics is being sold to a new start-up that plans to dive into the medical market with a new dialyzer, a key...    More

Image

Hong Kong's TK eyes expansion, may buy Nypro Tool operation

September 19, 2014 2:49 pm ET

Hong Kong-based mold maker and plastics processor TK Group (Holdings) Ltd. said it's reached a tentative agreement to buy a tooling factory in...    More

Exo-s buys injection and blow molder in Mexico, expands footprint

September 19, 2014 2:15 pm ET

Custom molder Exo-s Inc. has bought an injection and blow molding operation in San Juan del Rio, Querétaro, Mexico.    More

Image

Bayer spinning off plastics business

September 18, 2014 8:49 am ET

Bayer AG will spin off its MaterialScience plastics group into a separate, publicly-traded company within the next 12 to 18 months.    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

Shale Gas Market - Analysis of North American Region

This report highlights the impact of shale-based natural gas on the North American plastics market and features an in-depth analysis of production trends in the United States during 2013 and a forecast for 2014 and beyond.

Learn more

Thermoformed Packaging 2014 Market Review & Outlook – North America

This in-depth report analyzes economic and market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as growth strategies being implemented by thermoformed packaging companies.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

More Events