In another growth move, Spartech Corp. has agreed to acquire the net assets of Echlin Inc.'s Preferred Plastic Sheet Division.
Preferred's extrusion and profile operations ``will provide Spartech with certain new production capabilities and strong technological leadership in the manufacture of polyethylene sheet products,'' Bradley B. Buechler, president and chief executive officer of Clayton, Mo.-based Spartech, said in a news release.
Buechler said the combination, when completed, would result in a company with annual sales exceeding $575 million and annual resin throughput of more than 750 million pounds. Spartech would assume additional debt to make the acquisition.
Preferred employs about 300, generates annual sales of more than $75 million and operates facilities in Greenville, Ohio, where the division is based; Taylorville, Ill.; Greensboro, Ga.; and McPherson, Kan. Preferred acquired the latter site from Plains Plastics Inc. in late 1995.
Spartech's extruded sheet and roll stock group operates 13 Spartech Plastics and GM-Plastics facilities. Three came from the most recent of Spartech's acquisitions, Portage Industries in May 1996 and Hamelin Group in September.
Spartech operates nine other plants, largely for color and specialty compounding and the manufacturing of injection molded products.
Preferred Plastic Sheet has changed owners often.
The Dearborn, Mich.-based automotive segment of United Technologies Corp. owned the business until a 1993 sale to Preferred Technical Group International Inc. of Rochester Hills, Mich. In December 1994, Echlin of Branford, Conn., acquired PTGI, including the sheet operations, for $198.3 million.
Spartech expects to complete the acquisition of Preferred Plastic Sheet by Aug. 31, the end of Echlin's fiscal year. Buechler said acquisition terms will be disclosed after the closing.
Spartech intends to finance the deal through a new $50 million private debt placement and ``plans on upgrading Preferred's manufacturing equipment and putting additional capital into their facilities during the next 12-18 months,'' Buechler said.
Spartech employs 1,850 and reported profit of $21.9 million on sales of $448.7 million for the 12 months ended May 3. Profit for the prior 12 months was $16 million on sales of $363.2 million. Spartech's fiscal year ends in late October.
Echlin, principally a supplier of automotive parts, employs about 27,700 and recorded profit of $136.8 million on sales of $3.4 billion for the 12 months ended May 31. Profit was $146.5 million on sales of $3 billion for the prior 12 months.