In a move expected to boost business from a major customer and throughout Europe, Caco Pacific Corp., one of North America's largest tooling companies, has purchased a French mold maker owned by Gillette Co.
The European acquisition, which is unusual for a U.S. toolmaker, gives Caco Pacific ownership of mold shop S.F.A.I.M. of Lyon, France. The French company supplies high-precision injection molds used by Gillette and others in Europe.
Terms of the deal, which was completed Oct. 31, were not disclosed. Caco Pacific acquired all the outstanding stock of S.F.A.I.M. in a cash transaction.
The purchase will help Caco Pacific support its growing international business, President Manfred Hoffmann said.
``This acquisition will bring us closer to our existing customers in Europe, while at the same time offering new market opportunities in that part of the world,'' Hoffmann said.
Caco Pacific's international customers typically are large original equipment manufacturers, like Gillette.
The plant is the first for the toolmaker outside North America. S.F.A.I.M. is one of the five largest moldmakers in France, Hoffmann said. Most of its products are multicavity molds, including hot-runner molds, he said.
Caco Pacific, which employs 200, is located on a 70,000-square-foot, four-building campus in Covina, Calif. The company ships more than 30 percent of its molds outside the United States. The toolmaker's annual sales are $25 million to $30 million, Hoffmann said earlier this year. The firm is considered one of the largest, if not the largest, U.S. moldmaker.
Caco Pacific has no immediate changes planned for S.F.A.I.M., but expects to invest in capital and human resources and go after new business in Europe, Hoffmann said.
Caco Pacific hopes to use its expertise in multicavity molds, hot-runner systems and stack molds to broaden S.F.A.I.M.'s market scope in Europe, the company said.
By acquiring S.F.A.I.M., Caco Pacific also will have the opportunity to do more work with current customer Gillette, said Gillette spokesman Eric Kraus. About 85 percent of the French company's sales are to Gillette, where the tools are used to make razors, razor cartridges and pen parts, Kraus said.
The other 15 percent of S.F.A.I.M.'s sales are to such companies as Eastman Kodak Co., Sony Corp., IBM Corp. and BASF Corp. for the manufacture of plastic housings and other parts. The company specializes in multicavity, hot-runner injection molds for complex components.
S.F.A.I.M. recorded sales of about $5.2 million in 1996, Kraus said. The 52-year-old company, which has about 50 employees, has been owned by Gillette since 1962, when the consumer-products maker bought it to support its European expansion. About 70 percent of Gillette's business is conducted outside the United States, Kraus said.
Gillette decided to sell S.F.A.I.M. to concentrate on core businesses, Kraus said. The Boston-based company is considered the market leader worldwide in shaving and grooming products, Kraus said.
``Over the last couple of years, we have refocused our energies on what we do best,'' Kraus said. ``We believe that by selling S.F.A.I.M. to Caco Pacific, we can still utilize the expertise of the company and grow our relationship with Caco Pacific at the same time. As a third-party expert in plastic injection molding, Caco Pacific can only help the company continue to do well.''
The purchase is highly unusual for a North American toolmaker, said Jeffrey Mengel, a partner with consulting firm Plante & Moran LLC in Southfield, Mich. Mengel, who is preparing a study on the mold-making business, said it is more common for foreign toolmakers to set up shop in this country.
Yet, Caco Pacific's acquisition could be a forerunner for other acquisitions overseas, especially by larger toolmakers, Mengel said.
``Many mold-making facilities are already doing a lot of business overseas,'' he said. ``In fact, it's necessary to follow customers to other countries and collaborate with them. By globalizing, a [mold maker] can create more value by focusing on faster delivery.''