A small Minnesota injection molder, STI Inc., plans to purchase a much larger Midwest molder, CR Manufacturing Inc., in the first of what is likely to be several acquisitions.
To guide that expansion, STI has hired a former executive at carmaker Yugo America and Nordic Track, Marcel Kole. He is chief executive officer of STI, a position he will keep in the new company.
Details of the stock purchase were not disclosed, but Kole said the combined company will have about $13 million in sales, more than four times the $2.5 million to $3 million in annual sales for STI. The companies expect to complete the deal this month.
``We are not stopping with this merger,'' he said. ``It is my belief that there are tremendous opportunities.''
STI is based in St. Bonafacius, Minn.
The company probably will look at other custom injection molders, concentrating on those without customer bases that overlap current business, a very important factor in the purchase of CR, Kole said.
CR, based in Mound, Minn., also has a plant in Grantsburg, Wis. The firm makes proprietary restaurant and bar items, and recycling bins and diaper pails. The companies announced the deal Aug. 22.
``The merger of these two companies will pool the marketing strength of CR with the operating strength of STI,'' Kole said.
CR CEO Fred Guttormson will become the executive vice president of sales for the combined company. Guttormson had been the major owner of CR, but his expertise is in marketing, Kole said.
Officials are considering some plant consolidation as part of the merger but Kole said there is no immediate need to eliminate jobs.
STI has been in business since 1968; Kole was hired in January and charged with developing an aggressive marketing program. The company's stock is traded locally, and it has about a half a dozen major shareholders whom Kole declined to identify.
In addition to being chief financial officer at Yugo America, Kole was CFO of Nordic Track in Chaska, Minn., from 1990-93, chief operating officer of air mattress maker Select Comfort Inc. in Plymouth, Minn., from 1993-95 and chief operating officer of carpet recycler United Recyclers Inc. in St. Louis Park, Minn., in 1996.
STI's largest customer is snowmobile maker Polaris.
