Paris-based Francois-Charles Oberthur will buy Kirk Plastic Co., a Los Angeles manufacturer of credit cards. The companies signed a definitive agreement Aug. 15, and expect to close the cash deal by Oct. 1, said Kirk R. Hyde, Kirk's president, chief executive officer and owner. Hyde would not disclose the purchase price.
Both Oberthur and Kirk are high-security printing companies, though, so far, Oberthur's U.S. manufacturing has been limited to printing lottery tickets, and postage stamps for the U.S. Postal Service, Hyde said by telephone.
But in Vitru, France, Oberthur manufactures credit cards and smart cards for the European market. The company claims to be the world's largest supplier of smart cards: plastic cards equipped with microprocessor chips that are used in electronic banking transactions. It also prints bank notes for the central banks of 35 countries.
Kirk brings more than $25 million in plastic bank transaction and credit card sales to the deal, with Visa and MasterCard cards making up roughly 70 percent of that business, Hyde said. The rest comes from cards for retailers like Neiman-Marcus Co., gasoline companies and cards for automatic teller machines.
In Los Angeles, Kirk employs 270 at three facilities that house production, marketing and sales. The company produces more than 100 million cards a year for the U.S., Latin American and Asian markets.
For Hyde, selling his company means keeping pace with its international competitors, by hooking up with a larger, international player that offers new products, world markets, technology and capital.
He noted that, when the deal is done, he will have a three-year contract to stay on as Kirk's president.
Oberthur's plans for Kirk include adding smart-card production at Los Angeles, a move that probably will involve doubling the size of Kirk's 25,000-square-foot manufacturing plant there by next year, Hyde said.
The French firm also will use Kirk's Latin American customer connections to boost market share for smart cards in the region.
``Our customers see these electronic smart cards as being the future,'' Hyde noted.
Kirk makes its cards from four-ply laminated PVC sheet; a typical sheet measures 20 inches by 24 inches and yields about 54 cards.
During lamination, each card is personalized - embossed with a name and number and encoded with a magnetic strip. Then they are die-cut and hot-stamped with signature panels, holograms and the like.
Kirk buys its PVC sheet from Klockner Pentaplast of America Inc. in Gordonsville, Va., and Mazzucchelli Vinyls srl in Varese, Italy, Hyde said.
Oberthur employs 2,500 at 18 printing plants worldwide.