While launching its initial public offering, Compass Plastics & Technologies Inc. is looking for molding acquisitions.
``This company will definitely consider acquisitions as part of the growth plan,'' President Michael A. Gibbs said in a telephone interview from his Gardena, Calif., office. ``We will put additional debt on the company.''
As president of Compass and chief executive officer of its AB Plastics Corp. subsidiary, Gibbs focuses more on growth strategies than on operations. The firm injection molds components for computer monitors and television sets and provides decorating and assembly services.
Compass is offering 1.2 million shares of common stock, and existing holders Sirrom Investments Inc. and Private Equity Partners LP are offering, respectively, 82,000 and 51,333 shares. The companies expect the stock to sell for $8.50-$9.50 per share.
The firm will have 4.76 million shares of common stock outstanding when the offer is complete.
Management plans to make investor presentations in at least 10 cities, with stops in Boston, Philadelphia, New York and Baltimore during the week of Aug. 25.
After the offering, principal owners will include North Atlantic Smaller Cos. Investment Trust plc of London, with 16.5 percent; Sirrom of Nashville, Tenn., 15.1 percent; and Geoffrey J.F. Gorman and Private Equity Partners of New York, 13.6 percent. Gibbs will hold 10 percent. Gorman is Private Equity's managing partner and Compass board chairman.
With the offering's proceeds, Compass plans to repay $4 million in debt, equip its newly constructed facility in Tijuana, Mexico, and build a warehouse and distribution center at the firm's principal location in Gardena.
Additional loans are to help pay for equipment and construction.
The first press at the company's maquiladora, AB Pl sticos SA de CV, will begin operations in late August in Tijuana.
Three more machines will begin operating in September, and another eight by November. The presses have clamping forces of 850-1,450 tons. Of the 12 machines, Compass will buy five and transfer seven from Gardena.
AB Pl sticos occupies a new, expandable plant with 90,000-square feet of space near the Tijuana operations of customers Sony Electronics Inc., Matsushita Electronic Corp. of America and Casio Manufacturing Corp.
The site employs 16 now and should reach 150 by year-end. The firm is installing eight paint lines and four automated assembly lines in Tijuana.
On the equipment front, ``We started the year with 27 [molding] machines and will have 34 after Tijuana is up and running,'' Gibbs said.
On Aug. 20, Compass completed the acquisition of the Gardena facility for $3.1 million.
On Aug. 25, the company planned to begin demolishing a 20,000-square-foot warehouse on the premises and constructing a 75,000-square-foot warehouse and distribution facility for use by the end of the year, Gibbs said.
The new building will adjoin a 100,000-square-foot manufacturing facility in Gardena and allow Compass to sublet a leased, 60,000-square-foot warehouse and distribution site in Compton, Calif.
James Adams is AB Plastics president. His son, Stephen, has held engineering and technology positions at the firm since 1982 and was named vice president of technology about a year ago.
An Aug. 12 prospectus said that some clients of JO Hambro & Partners Ltd., including certain Compass shareholders, are interested in buying 105,000 shares of the offering. JO Hambro, a London-based money management company, provided much of the equity in September when Compass bought AB Plastics from members of the Adams family for $7 million.
Compass employed 379 as of July 21. The business had pro forma profit of $671,000 on sales of $39.3 million for the fiscal year ended Oct. 27, 1996.
Compass reported profit of $1.2 million on sales of $20.2 million for the 26 weeks ended April 27.
Cruttenden Roth Inc. of Irvine, Calif., and Josephthal Lyon & Ross Inc. of New York manage the stock offering.
Shares will trade on the Nasdaq National Market.