TORONTO — Cinram Ltd. expects to more than double its compact disc molding and replication capacity, to more than 400 million units a year, by acquiring Disc Manufacturing Inc. of Wilmington, Del., for about US$80 million. Disc Manufacturing's plants are in Anaheim, Calif., and Huntsville, Ala. It logged sales of $82.4 million for its year ended June 30.
Toronto-based Cinram molds CDs in Toronto and Richmond, Ind. Isidore Philosophe, its chairman and chief executive officer, said the deal will expand Cinram's CD and CD-ROM customer base.
Disc Manufacturing's newly opened Anaheim facility also is near major software companies, which will help Cinram's plans for manufacturing DVDs, previously called digital versatile discs. Officials were unavailable to comment on molding machinery details of the two companies.
Quixote Corp. of Chicago owns Disc Manufacturing. It expects to complete the sale to Cinram by Feb. 28. Quixote's other major business is Energy Absorption Systems Inc., which has rotational molding operations. Quixote Chairman Philip Rollhaus said his firm will focus on Energy Absorption's broad markets for highway and safety products. He said in a news release that the CD industry is consolidating and has become increasingly competitive.
The agreement in principle was announced Dec. 9, less than two months after Cinram said it will form a joint venture with Trace Corp. of San Jose, Calif. The Trace Optical venture will supply turnkey optical disc manufacturing systems.
Publicly held Quixote trades on Nasdaq. Cinram trades on the Toronto Stock Exchange and Nasdaq, and had sales of C$270 million (US$199.8 million) last year, including sales of video and audio cassettes, and video distribution.