Stockholders of HPM Corp., the second-largest U.S.-owned maker of plastics machinery, are expected to sell their shares to Stadco Inc., a Los Angeles company that makes tooling and machinery for the aerospace market. Officials of both companies say the deal will help HPM significantly increase its business and become more global.HPM, headquartered in Mount Gilead, Ohio, announced the agreement Feb. 27. HPM President William Flickinger said that, under the agreement, Stadco agreed to pay $40.06 per share for all the company's stock - with the exception of stock owned by Flickinger.
``Essentially, they are buying out all of the shareholders but myself,'' Flickinger said.
HPM, a closely held public company, has about 270 general shareholders, plus about 150 shareholders from its employees. HPM offers stock to salaried workers through its 401(K) retirement plan.
``We believe that about 75 percent of the stock is owned by current employees, retired employees and directors of the company,'' said Flickinger.
He declined to say how many shares he owns.
He will remain as president.
An HPM news release used the term ``merge'' to describe the transaction. Flickinger said HPM's board met Feb. 26 and approved an ``agreement of merger.''
Shareholders will meet March 28 to vote and Stadco wants to complete the deal, which shareholders favor, April 1, he said.
HPM, established in 1877 to make apple presses, manufactures injection molding machines, extruders, screws and die-casting equipment. HPM had 1995 sales of more than $100 million. The company employs 650 in Mount Gilead and 95 at its Remanufacturing Division in Marion, Ohio.
HPM is the second-largest U.S.-owned plastics machinery maker, behind Cincinnati Milacron Inc. That status will remain intact, because Stadco, a major defense contractor, is U.S.-owned, said Neil Kadisha, Stadco's president and chief executive officer. The HPM name will remain.
``HPM will enable Stadco to broaden its base of business beyond aerospace tooling and special design machinery,'' Kadisha said.
Flickinger said no major management changes are anticipated at HPM. HPM has a reputation as a stable employer, led by veteran managers who own stock in the firm. But Stadco will help HPM grow, he said.
``If we want to take the next quantum leap, if we want to go from $100 million to approach $200 million, we were going to have a difficult time from a financial standpoint trying to grow the business to that level,'' Flickinger said.
Flickinger said Stadco contacted HPM last October.
``We were not out selling the company. I received a letter basically indicating that Stadco very much wanted to talk to HPM about the possibility of a partnership between the two companies.''
Officials of the two firms held numerous meetings. Kadisha spoke at the Feb. 26 meeting of HPM's board.
Flickinger said HPM shareholders will receive a total of $15 million for the stock. Kadisha said the total amount of the deal, which transfers all HPM assets and liabilities to Stadco, is about $35 million.
Stadco is privately owned, and does not release sales data. Founded in 1941, the company serves major aerospace and defense firms such as Boeing, McDonnell Douglas and Northrup Grumman. It does complex assemblies and does specialized, high-precision metal machining, often of only a few molds or parts for a given customer. Some of the parts are huge; a company brochure shows giant molds for making jet wings.
Kadisha, in a telephone interview last week, said joining with HPM will enable Stadco to use its technology to make higher-volume machines.
``Our design and engineering capability will bring aerospace technology to commercial industry and will enhance design and manufacturing of commercial equipment,'' Kadisha said.
HPM does much of its own machining and has computer-aided design systems in place. But Flickinger said Stadco can help HPM improve in both areas.