Steel Technologies Inc., a Louisville, Ky.-based steel processor, plans to enter the plastics industry with its proposed acquisition of injection molder Vincent Industrial Plastics Inc. Steel Technologies announced Aug. 23 that it had signed a letter of intent to acquire the assets of Vincent, a 33-press automotive and appliance industry molder based in Henderson, Ky.
The deal, for an undisclosed purchase price, is expected to be completed by October.
The acquisition makes sense because both companies are involved in the auto and appliance industries and share many of the same customers, said Kenneth R. Bates, chief financial officer of Steel Technologies.
Vincent, although not a ``stellar'' financial performer, has an excellent reputation for molding high-quality goods, he said. Steel Technologies plans to bolster Vincent's financial condition and increase volume by putting Steel Technologies' sales force to work for the molder.
Vincent, with 170 employees, has had annual sales of about $10 million in recent years. Owner James F. Vincent said it was his understanding that Steel Technologies planned to hire all of the molder's work force, but the final decision on employment rests with Steel Technol-ogies.
Vincent said he founded the company in 1981, after leaving Cyanede Plastics, now a unit of Atlantis Plastics Inc. of Miami. Vincent Industrial Plastics molds automotive interior trim and under-hood parts for automakers and larger suppliers. The company operates injection presses with clamping forces ranging from 50-700 tons, in a 70,000-square-foot plant.
Steel Technologies, with five plants in the United States and Mexico, is projecting sales of $250 million this year. It processes flat-rolled steel into various thicknesses and widths and also tempers and finishes the metal. About 75 percent of its sales are in the automobile industry, but it also sells into the appliance, communications, electrical goods and machinery markets.
The company also is involved in a joint venture with Japanese-owned Mitsui & Co. in a Louisville-based steel processing firm called Mi-Tech Steel Inc. The joint venture, which supplies steel to Japanese car companies in the United States, expects sales of $100 million this year.
Vincent, who will continue as president of the company after the acquisition by Steel Technologies, said the deal makes sense because of the companies' common customer base. He also expects sales to increase.
``It certainly will provide us with ample capital to take care of larger opportunities that come along,'' he said. ``It's our intention to grow.''
Although Vincent doesn't have any immediate plans to expand, that also is a goal.
Now, with Steel Technologies' backing, he said his company is better able to compete against larger, technically advanced competitors.
``There's a lot of consolidation taking place and we're certainly not the exception,'' he said. ``This is the direction we have to take to be successful.''