TORONTO — Two firms that indirectly bid against each other last year for automotive parts molder Tarxien Corp. will join forces to expand their molding and painting capabilities.
Versatech Industries Inc. of Toronto said Oct. 14 it acquired PaintPlas Inc., a C$50 million-(US$36.3 million-) per-year auto parts painter for Tier 2 automotive customers. PaintPlas is based in Ajax, Ontario, near Toronto.
Officials did not disclose terms of the deal, but acknowledged it includes PaintPlas' two former owners becoming investors in Versatech. Versatech is majority shareholder of Gecamex Technologies Inc., which bought Tarxien in November.
Ian Macdonald, Versatech's chairman and chief executive officer, said the deal will mean his firm can offer a full gamut of auto part molding and painting services, from small parts like door handles to large exterior components such as body panels. PaintPlas' vertical paint lines will complement Tarxien's horizontal painting technology.
``Customers vary on which they want,'' Macdonald said.
Richard Myron, former PaintPlas chairman, president and CEO, said the deal meets his aims of adding molding to PaintPlas' services. When his company lost out in the bid for Tarxien in late 1996 he said PaintPlas would start its own injection molding operation by 1998.
``We believe [the deal is] a good idea for the market,'' Myron said. ``We failed to acquire [Tarxien] directly so we did it this way.''
Myron will continue as CEO of PaintPlas and be responsible for integrating Versatech's exterior, top-coated molding operations.
Macdonald said Versatech's extra capabilities should help it land new business. He said the firm will add capacity as necessary, although he would not provide a specific timetable.
The company also remains on the lookout for acquisition opportunities.
Versatech's operating subsidiaries in the United States, Canada and Mexico make interior and exterior door-handle assemblies, interior trim, molded plastic components, plastic and metal and rubber subassemblies for under-the-hood and powertrain systems, plastic tooling and reusable auto part packaging systems. Its operating subsidiaries include Tarxien, PaintPlas and Hi-Craft Engineering Inc.
Versatech is amalgamating with Gecamex, a move the firms announced in May. Last year Versatech's and Gecamex's combined sales were about C$210 million (US$151.8 million).