Metals distributor A.M. Castle & Co. plans to diversify by acquiring Total Plastics Inc., a $25 million-per-year plastics distributor based in Kalamazoo, Mich. Castle signed a letter of intent to buy Total for an undisclosed price in a deal it hopes to complete by year's end. The Franklin Park, Ill., metals firm trades on the American Stock Exchange and reported sales of $537 million and profit of $15.4 million last year.
Total is wholly owned by its president, John Kozacki, who said he and other executives will remain with Total after Castle buys it and makes it a separate division.
Richard Mork, Castle's president and chief executive officer, said in a news release that Total's value-added products and services are a strategic fit with his company.
``We are intent on growing this [new] aspect of our business,'' said Robert Pegnato, Castle's assistant to the president.
He declined to say whether Castle is looking at other plastics acquisitions.
Kozacki said Total distributes plastic rod, sheet and tubing and offers assembly and converting services such as bending, cutting and routing. Its specialty businesses include acrylic store fixtures, converting pressure-sensitive foam tape and distributing lighting components, a business it bought last spring. Its facilities are in Kalamazoo and Grand Rapids, Mich., Elk Grove Village, Ill., and Fort Wayne, Ind.
``Total is a platform for Castle to build a significant plastics distribution business,'' Kozacki said.
Total will be able to grow much faster with Castle than if it remained an independent company, he said.
Castle's 26 facilities supply a variety of steels, aluminum, nickel alloy, titanium, copper and brass to more than 30,000 customers. Pegnato said the firm has been in business for more than 105 years.