Bemrose Corp. plc, a top British security printer and promotional goods company, paid $6 million to acquire Gerber Industries Ltd. of Phoenix, a family-run decorator and marketer of water bottles and other plastic promotional products.
The Beverley, England-based company plans to expand production at its new subsidiary. It expects to double the firm's output within two or three years and may bring blow molding in-house, according to Bemrose finance director Richard Harrison.
Its purchase of the $5.1 million Gerber operation is designed to cut transportation costs by bringing the firm closer to the West Coast promotional goods market, he said. Its existing plants are clustered near Chicago, he said.
Bemrose claims to be the biggest manufacturer in both U.S. and United Kingdom markets for promotional products. The firm already owns six U.S. subsidiaries, two of which produce plastic pens and office accessories.
One of the two plants in Cedar Rapids, Iowa, operates eight injection molding machines, producing ballpoint pen barrels for overprinting. It has annual sales of around $35 million. The second unit decorates ready-supplied desk accessories.
Through Gerber, which makes and markets the Huffer line of plastic products, including bottles, visors, kazoos and yo-yos, Bemrose wants to tap the low-cost $5-and-under segment of the $8 billion U.S. promotional goods market, Harrison said in a telephone interview from Beverley.
In a news release, Chairman Rodger Booth said the takeover gives his firm ``our first foothold in a new and exciting segment'' of the U.S. promotional products market. He added that the acquisition will help broaden the seasonal limitation of Bemrose's existing business.
The water bottles, which are 85 percent of the Phoenix plant's output, are outsourced from custom blow molders, then decorated and marketed by Gerber.
Gerber reported $560,000 in profit for the year ended February 1996 and expects to raise sales to $7 million with 1997 profit at $800,000, Bemrose said.
Bemrose paid $4 million in cash and $2 million in newly issued stock to buy Gerber. President Paul Gerber and Vice President Pam Gerber have signed a service contract with the new owners. Bemrose claims a 15 percent share of Britain's $676 million promotional products market. In the United States, plastic products account for $50 million worth of sales.
The firm's product range includes personalized calendars and diaries, custom-decorated pens and pencils, awards and trophies, crystal mugs and leather goods such as company conference folders.
Bemrose plans further expansion in the United Kingdom and United States, perhaps through acquisition, in the coming year.