Gecamex Technologies Inc.'s successful bid to acquire Tarxien Corp. makes it a significant auto parts molder. More than 98 percent of Tarxien's shares were tendered in Gecamex's C$15.40 (US$11.40) per-share offer, which expired Nov. 28. Gecamex of Leamington, Ontario, will pay about C$48.9 million (US$36.2 million) for all Tarxien shares, including those recently issued under options held by shareholders.
Tarxien also indirectly boosts the thermoplastic injection molding business of Versatech Industries Inc. of Toronto, which owns 75 percent of Gecamex. Versatech and Gecamex have diverse auto parts businesses that have grown through recent acquisitions and internal expansion.
Tarxien injection molds door handles, interior trim and exterior body panels on 39 presses at plants in Ajax and Concord, Ontario. Its Concord facility also paints parts. Its biggest contracts are for General Motors Corp.'s Suburban, Yukon, Tahoe and Saturn vehicles. Earlier this year it predicted sales of C$100 million (US$74 million) for the 1999 model year. Its nine-month sales on Sept. 30 were C$45.9 million (US$34 million).
Versatech President Rob Lee said his firm will integrate Tarxien's raw material, marketing and computer-aided design technology with Gecamex and Versatech but he said it was too early to know exactly how Tarxien will fit other operations.
Gecamex was formed in 1993 as a public company from the Gecamco group of companies founded by Matt Baumgartner in the 1980s. Its Bauerhin Division injection molds thermoplastic parts in Acuna, Mexico, and makes auto interior trim and interior door panels there and in Windsor, Ontario.
Gecamex's Joh Division molds elastomers and makes auto sealing systems in Leamington. It also compression molds thermoset composites using technology Gecamex acquired when it bought Raytak Automotive Systems Inc. of Toronto in 1994.
Gecamex's Apex Metals division does metal auto part stamping and assembly in Kitchener, Ontario. Lee estimated Gecamex's sales will be about C$60 million (US$44.4 million) for the year ended Dec. 31.
Versatech began making returnable and reusable plastic and metal packaging for auto parts in 1991. Its packaging operations in Toronto and Detroit use thermoforming, sonic welding and other processes. In the past 18 months it bought several firms, including its Hi-Craft Engineering subsidiary, an automotive injection molder and tool maker in Detroit.
Hi-Craft's products include control switches and under-the-hood parts. Nasdaq-traded Versatech will record sales of about C$105 million (US$77.7 million) in 1996, Lee said.
Versatech acquired a 20 percent chunk of Gecamex in mid-1995 in a share swap involving a Versatech subsidiary. It gradually increased its holding, and early this year got control and replaced Gecamex senior executives, including former chairman Baumgartner and president Fraser Wray. The dismissals cost Gecamex C$1.1 million (US$814,000).
Lee said Gecamex will retain most senior management at Tarxien and expects that its former president and major shareholder Ralph Zarboni will act as a consultant for six months.
Tarxien's board of directors has resigned and been replaced by Rob Lee, Jack Lee, who is Gecamex's chairman, and Ian Macdonald, a director of Gecamex and a partner in private merchant bank Tricapital Management Ltd. of Toronto.
Gecamex said Dec. 2 that Versatech helped arrange C$13 million (US$9.6 million) worth of financing for the Tarxien purchase. In exchange, Gecamex issued to Versatech a promissory note and Gecamex share-purchase options, which, if exercised, will boost Versatech's stake in Gecamex to 79 percent.