Rugby Group plc is buying Pioneer Plastics Corp. of Auburn, Maine, for $71 million in cash. The company is Rugby's first plastics acquisition, said Rich Agostinelli, chief executive officer at Rugby Holding Inc. of Deerfield, Ill., the British firm's U.S. arm. Pioneer makes high-pressure decorative laminates, specialty resins and custom saturated papers at its 520,000-square-foot facility in Auburn, he said. A 180,000-square-foot plant, in Morristown, Tenn., manufactures a variety of specialty products, including phenolic- and polyester-treated sheet used for aircraft cargo liners. He would not disclose equipment at either plant.
Assets include a warehouse in Atlanta, and 15 leased distribution centers across the United States.
The Pioneer buy is part of Rugby's strategy to expand its U.S. market.
Last year, looking to do just that, the firm opened 24 new distribution sites for its Rugby Building Products division, which sells wood cabinets, countertops, insulation and vinyl siding made by various manufacturers.
About the same time, the company began making its move to acquire a manufacturer of products that fit into its customer distribution base, Agostinelli said. Pioneer's Pionite HPL already was among its product offerings.
Internationally, Rugby Group's three basic businesses are cement and lime, mainly in the United Kingdom and Australia; wood doors and windows for interiors; and steel reinforcement products for the construction industry. Of its $1.6 billion in sales last year, about $600 million were in its millworks business, which operates in England as John Carr Group plc, with the remaining business evenly split between its other two segments, Agostinelli said.
The Pioneer plants are Rugby's first U.S. manufacturing sites. RBP operates a small, vinyl window assembly plant in Hagerstown, Md., and its 44 distribution centers sell to retailers nationwide.
The division is focused on developing its sales to industrial markets, which make up 25 percent of its sales, according to a Rugby news release. Pioneer's distribution sites will extend RBP's reach into new territory, particulary in the Northwest, Texas and Florida, the release said.
HPL makes up 50 percent of Pioneer's $179.5 million in sales, according to Doug McDonald, Pioneer's vice president of finance. The sheet is used in counter and desk tops, and a variety of industrial applications. It comes in 195 standard patterns, in varying widths, lengths, thicknesses and finishes, and can be customized for such properties as chemical resistance.
Pioneer's custom business, about one-third of the total, mainly serves original equipment manufacturers, McDonald said. The company claims to hold 8 percent of the U.S. market for HPL, competing with such materials as Wilsonart and Formica.
Pioneer's laminated products business originally was part of Trinova Corp.'s Sterling Engineered Products division. In 1989 a group of Trinova managers, along with Guaranteed Security Life Insurance Co. of Jacksonville, Fla., acquired the business in a leveraged buyout, McDonald said. In 1991, GSLIC went bankrupt, then into receivership. The receivership sold the company to Rugby.
The parties reached a purchase agreement June 30, McDonald said in a recent telephone interview.
GSLIC's bankruptcy never affected Pioneer's business, McDonald said.
The company's current management, including McDonald and President Dick Schneider,will remain with the firm. Pioneer will keep its name, McDonald said. The company employs about 1,000.
The transfer will be ``largely transparent'' to most of Pioneer's customers, he said.
Pioneer's specialty resins include wet-strength resins for paper making, and a polyester resin used in the powder-coatings industry, McDonald said. Its custom saturated papers are used to make products such as melamine board. The firm also makes decorative polyester-treated profiles used in wrapping picture frames; a flexible decorative laminate for the do-it-yourself market; and melamine board, which McDonald called a low-cost alternative to HPL.
Rugby Group had sales last year of about $1.6 billion, or P1 billion, Agostinelli said. The company is based in Rugby, England, about 80 miles north of London. Its shares are traded on the London Stock Exchange.