PMC Inc. of Sun Valley, Calif., is buying the Coz Chemical plastics compounding division of Allied Products Corp.
PMC's Plastic Color-Chip subsidiary, a color concentrate manufacturer based in Somerset, N.J., will operate Coz, which is in Northbridge, Mass.
Plastic Color-Chip President Raymond Lachapelle said the acquisition marks the company's first compounding venture.
``Coz gives us a totally different palette,'' said Lachapelle, whose company posted sales of $40 million last year. ``They're using [styrene acrylonitrile] and PET and other materials in blending compounds. In color concentrates, we were using polyethylene, polypropylene and polystyrene.''
Coz's 250,000-square-foot plant produces custom thermoplastic compounds on six extrusion lines. The compounds are used in injection molding, extrusion, blow molding and thermoforming. Coz also produces a smaller line of color concentrates.
Coz was the smallest of Allied's three divisions, holding only a $34 million share of the company's 1996 sales figure of $270 million. The division, which Allied owned for 28 years, employs about 140.
Chicago-based Allied decided to sell the unit to concentrate on its core metal-stamping and agricultural equipment business.
About 70 percent of Coz's sales is in the grooming and cosmetics market. Gillette Co. is its biggest customer.
Coz had been looking for acquisitions as recently as last summer, but Allied officials reversed direction after testing the market.
``We determined that course was not in our best interest based on market conditions,'' Kenneth Light, Allied executive vice president and chief financial officer, said in an Aug. 28 telephone interview. ``There are also needs in our other divisions where capital and management are concerned.''
Plans to build a second plant in the Northbridge area, which company officials discussed in July 1996, also never materialized.
Light said the sale is a good opportunity for both companies, since APC was ``nominally and very slightly'' in the plastics business.
``We're basically in metal fabricating,'' Light said. ``And that's a far cry from the business Coz is in.''
Lachapelle said Plastic Color-Chip's diversified presence, with plants in Calumet City, Ill., and Ashboro, N.C., will allow Coz to grow in the plastics industry.