A Cleveland investment firm has purchased a majority stake in injection molder Hartzell Manufacturing Inc., a move designed to provide the company with capital for expansion.
Linsalata Capital Partners purchased the St. Paul, Minn.-based firm, which also does metal die-casting and custom engineering, from a Minneapolis investment firm, Goldner Hawn Johnson & Morrison Inc., the companies announced April 22. Terms were not disclosed.
Hartzell had $94.5 million in total sales, and ranked 89th in Plastics News' most recent ranking of North American injection molders, with $51.5 million in injection molding sales.
Linsalata and its co-investors will own 87 percent of the firm, up from the 75 percent owned by GHJ&M, said Donn Barber, Hartzell's executive vice president. Hartzell managers also sold some of their shares and now own 13 percent of the 800-employee firm.
The firm doubled in size and ``profitably has increased more than that'' since GHJ&M purchased it almost four years ago, said Timothy Johnson, a partner in GHJ&M. The investment firm put more than $5 million a year into the manufacturing company, he said.
GHJ&M's equity investment fund that had purchased Hartzell, Marathon Fund II, closed about 18 months ago and does not have any capital left, he said.
``We have been pleased to be able to support the company's expansion but recognized, with Marathon Fund II fully invested, that Hartzell's future would be best served by new ownership's investment in Hartzell's continued growth,'' Johnson said.
Barber said the company is considering a Mexican expansion and has other growth plans, but he would not provide details.
``We are confident about the growth potential in our industry and look forward to further gains with Linsalata Capital Partners,'' Hartzell Chief Executive Officer Dwain Kasel said in a statement.
Linsalata Vice President Don Molten said his firm is looking at both internal growth and acquisition to expand Hartzell and said it would talk about details in three to six months.
Linsalata owns seven businesses nationwide with about $600 million in sales, he said. Hartzell's $94.5 million in sales puts it about in the middle of them, and is the first acquisition in the plastics industry, he said. The plastics business is expected to grow faster than die casting, with Linsalata expecting to put at least $5 million a year in capital investment into the firm, Molten said.
Hartzell plans to open a 30,000-square-foot plastic molding facility, its sixth plant, in leased space in Puerto Rico in July. The company is spending $1 million to improve the site, and will make components for markets such as electronics and medical, Barber said. The firm also plans to build a 40,000-square-foot facility in Denton, Texas.