Maxco Inc. of Lansing, Mich., has sold its injection molding unit, Wright Plastic Products Inc., to newly formed and privately held Plastic Acquisition Co. LLC for $10 million. Part of the proceeds from the Oct. 31 sale will go toward $2.5 million of long-term debt. No material gain or loss will be recognized as a result of the deal.
Plastic Acquisition is a temporary name, officials said. The Cleveland-based company will operate as Wright Plastic Products Co. LLC and will continue to manage the current injection molding facilities. The parent company will be called SynPlasTech Ltd. and also will be headquartered in Cleveland.
``We plan to continue operations as they have been,'' said Robert Luce, president of the new Wright Plastics. ``We're going to build on what's there and keep the employment structure.''
Luce said his firm will continue to acquire plastics companies.
After 12 years of running his own consulting firm, Robert Luce & Co. in Cleveland, Luce decided to apply the knowledge he had acquired. He said he had acted as a turnaround consultant for several plastic molding companies, injection molders, extruders and blow molders. Working in the plastics industry whetted his appetite, and now he has the opportunity to run his own firm.
Former Wright Plastics President Richard Johns will retain his position as Maxco vice president and president of Maxco's Akemi Inc. unit.
Wright Plastics employs 200 at plants in Sheridan and Marysville, Mich. The plants operate 33 injection presses and serve the automotive, electrical, computer, packaging, appliance, recreation, lawn and garden and medical industries.
Maxco Chairman and President Max A. Coon said the sale of Wright Plastics will allow Maxco to focus on acquiring companies with the potential for greater returns on investments.
``With the changes facing the automotive supply industry, it became apparent that opportunities other than Wright Plastics would allow us to create value at a faster rate,'' Coon said.
Wright Plastics posted an operating loss on sales of $17 million for the fiscal year ended March 31. The firm represented 21 percent of Maxco's sales of $80.2 million. Maxco's businesses include two plastics-related companies - Pak-Sak Industries Inc. and Akemi - as well as construction supply units Ersco and Wisconsin Wire & Steel. The firm expects sales of $70 million this year. Maxco reported Nov. 14 sales for the six months ended Sept. 30 were $40 million vs. $36.8 million in the same period last year.