Pro Management Inc., the new holding company that acquired Pro Corp. in December, has added a second custom molder to its stable: Apogee Plastic Technologies Inc. of Daytona Beach, Fla. PMI, backed by Chicago venture-capital firm Mesirow Private Equity Investments Inc., wants to acquire more plastics companies.
``Once we get a chance to digest these [firms], we'll be looking at making additional acquisitions,'' said Bill Sutter, managing director at Mesirow Private Equity. ``We want to buy a couple companies a year and build a major national group.''
Apogee, with annual sales of $22.5 mil-lion, and Pro Corp. at $16 million, are midsized custom injection molders that specialize in molding parts for business equipment, such as computer enclosures. Apogee touts its vertical integration, or theability to design, mold, do plating and shielding and assemble in one location.
Apogee occupies the former Fame Plastics Inc. plant in Daytona Beach, acquired in 1991 from Essef Corp.
Terms of PMI's purchase of Apogeewere not announced. Michael Gibbs, PMI chief executive officer, said about $4 million from the deal will go to reduce Apogee's debt to Essef and General Electric Capital Corp.
PMI bought ProCorp. of Florence, Mass., in December. PMI plans to run Apogee and Pro Corp. as independent companies, although both molders will share strengths.
Sutter said Mesirow expects to own Apogee and Pro Corp. for at least the next five years, while it builds a plastics group, and then possibly take them public or sell them.
Gibbs, former owner of Styrex Industries Inc., a custom molder in High Point, N.C., said many solid small and midsized plastics companies are attractive. Improved management can boost profitability at these firms to a level comparable to industry leaders, he said.
``Principal stockholders in PMI have all owned very successful plastics compa-nies in the past and have every interest in continuing to operate in the growing plastics field,'' Gibbs said.
Besides Mesirow and Gibbs, other owners of PMI are Winter Park Capital of Winter Park, Fla.; Terry Minnick, president and CEO of Pro Corp.; and Thomas Rudolph, Apogee vice president. Mesirow Private Equity Investments, which manages about $250 million in capital, is the largest PMI stockholder.
Neither Gibbs nor Mesirow would reveal the size of Mesirow's stake.
Gibbs is acting president of Apogee. Apogee's former president, Floyd Fulford, has become vice president of technology for PMI. Fulford was a founder of Fame Plastics.
PMI's purchase of Apogee was announced March 13. Apogee has laid off some employees, Gibbs said, declining to provide details. It employs about 300.
Apogee is a stronger firm now, he said in a recent telephone interview from Daytona Beach.
``Apogee now has $3 million in new equity and approximately $4 million less of funded debt,'' he said. ``So we came out of this thing substantially stronger financially.''
GE Capital was Apogee's senior lender and preferred stockholder. Gibbs said GE Capital had an option to convert warrants into a 75 percent stake in the company, an option that it never exercised. Gibbs declined to say whether GE Capital pressured a sale of Apogee.
``But if a company is not performing to expectation and it's given time to replace the existing lenders, and cannot, that's a problem,'' he said. ``Fortunately GE was able to find somebody to do what everybody knew needed to be done.''
GE Capital of Stamford, Conn., declined to comment.
In October, another molder in which GE Capital invested was not so fortunate. After the firm cut off financing, Component Technology Corp. of Erie, Pa., was forced to close, eliminating 240 jobs. At Apogee, the situation never sank to that point.
Rudolph, an Apogee founder, said the new capital will help the company grow: ``We expect our sales to exceed $35 million for the upcoming year.''
Apogee also molds general industrial products, such as gravity trays for coolers, air vents for conversion vans and frames for windows and mirrors.
