After buying four plastics machinery companies - AEC Inc., Sterling Inc., Wabash MPI and Carver Inc. - is St. Louis-based Harbour Group Ltd. looking for more? ``If they are a strategic fit with where we're going, the answer is, `Yes,'*'' said Sam Fox, Harbour Group's chairman and chief executive officer.
Fox founded Harbour Group in 1976. Following a consistent strategy of buying only small to midsized manufacturing companies, the holding company has grown to 64 companies in 12 divisions, generating sales of nearly $1.25 billion and employing more than 8,000. Those numbers include companies that have gone public in recent years. Fox said Harbour typically retains a significant ownership stake in the public firms and pays down debt with the proceeds.
``Once we get into an industry, we expand the business by making complementary acquisitions to broaden our product line,'' Fox said in a March 21 telephone interview. Harbour also consolidates when necessary, he said. However, Fox said no consolidation is currently planned at AEC, Sterling, Wabash and Carver.
In a deal announced March 9, Harbour bought Delcorp Inc. of New York, which owned the four companies, from Joseph Littlejohn Inc., a New York investment firm. Terms were not disclosed.
Total annual sales of the companies are about $125 million. They are:
AEC, a broad-line auxiliary equipment maker with facilities in Wood Dale, Ill., North Uxbridge, Mass., and Elk Grove Village, Ill. AEC employs nearly 1,000 in four divisions: AEC/Application Engineering, which makes chillers, temperature controllers and heat recovery equipment; AEC/Nelmor, which makes granulators and shredders; ro-bot supplier AEC/Application Automation; and AEC/Whitlock, which makes conveying, drying and blending equipment.
Sterling, a Milwaukee manufacturer of Sterlco-brand temperature controllers and chilling equipment, Sterltech robots and Ball & Jewell granulators and shredders. Sterling employs 180. Gilman King, Delcorp president and CEO, remains as president and CEO of AEC and Sterling.
Wabash and Carver, which are based in the same facility in Wabash, Ind. The companies employ 80. Wabash makes injection and compression molding machines for rubber and plastics. Carver produces small presses to make laboratory samples.
Harbour reviews more than 1,200 potential acquisitions a year, focusing on mature, fragmented industries. Harbour buys only companies it can understand, primarily smaller manufacturing firms, Fox said.
``We can give a company a great deal of strategic direction, a good deal of operations direction and help a company become more efficient,'' he said.
Privately held Harbour boasts that its sales and profitability have grown more than 25 percent, compounded annually, since its founding in 1976.
Only a few of Harbour's 64 companies operate in the plastics industry. Fox's son, Jeff, is president of one: Engineered Polymers Corp., a custom injection molder in Mora, Minn. Another, thermoforming machinery maker Sencorp Systems Inc. of Hyannis, Mass., went public in 1994 as part of DT Industries Inc. Several other Harbour firms make polypropylene fibers and yarn.
Harbour companies also do metal stamping, mold rubber seals and make cutting tools, pumps, alloys and optical instruments.