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Topics Materials, Mergers & Acquisitions, Materials Suppliers, Oceania
Companies & Associations A. Schulman Inc.
UPDATED — Materials firm A. Schulman Inc.’s buying spree has reached double digits.
The Fairlawn, Ohio-based company on Sept. 2 announced its 10th acquisition in four years, buying Australian compounder and concentrate maker Compco Pty. Ltd. for $6.7 million in cash.
Melbourne-based Compco makes compounds and concentrates, as well as cross-linked high density polyethylene. Key markets for the firm include packaging, wire and cable, and pipe. Compco posted sales of almost $15 million in the year ended June 30.
Compco employs about 25 and operates a pair of masterbatch concentrate production lines and several smaller color compounding lines. Most of the firm’s products are based on PE. Schulman is buying Compco from Bill McMahon, who founded the firm in 1984 as International Polymers. McMahon now has a five-year contract to remain with the company.
Schulman — a leading compounder and concentrate maker both in North America and Europe — had been supplying the Australian market from locations in Indonesia and Malaysia, a company spokeswoman said. The firm will continue to do so for some products, she added, but now will also be able to serve the local market from within Australia.
It’s the first deal for Schulman since June, when it paid $91 million in cash for most of the specialty plastics business of Ferro Corp. Schulman now has spent almost $530 million on its string of purchases.
“Although it’s relatively small compared with our entire organization, the benefits of Compco's industry-leading technology will better position our business in the region and can be leveraged throughout our global footprint,” Schulman Chairman, President and CEO Joseph Gingo said in a Sept. 2 news release.
Bernard Rzepka, executive vice president and chief operating officer, added in the release that Compco “holds a strong position and significant growth potential in the Australian market and beyond, and its products are aligned with our strategic focus and objectives in the Asia Pacific region.”
Rzepka also said in the release that the Compco deal marks Schulman’s first entry into the pipe and wire and cable markets, and that the firm “remains committed to growing both organically and through acquisitions in the strategically important [Asia Pacific] region.”
Gingo will retire as Schulman’s president and CEO on Dec. 31. Rzepka will replace him in those roles on Jan. 1. In the first nine months of its 2014 fiscal year — a period that ended May 31 — Schulman posted sales of $1.82 billion, up 14 percent vs. the same stretch in 2013. The firm’s profit also soared 40 percent to $41.6 million in the same comparison.
On Wall Street, Schulman’s per-share stock price started 2014 just above $34, but was near $39 in late trading Sept. 4 for an increase of about 15 percent.