Home Products International Inc. plans to cut its overall reliance on plastic resins in half by acquiring a laundry products manufacturer.
The Chicago firm agreed to buy Seymour Housewares Corp., a $94 million-per-year producer of ironing tables, ironing pads and related products. Its use of plastics is minimal, comprising mainly extruded components sourced outside, according to James Tennant, chairman and chief executive officer of Home Products.
The deal is Home Products' second acquisition attempt this fall. In late September it said merger talks with Zag Industries Ltd. broke down because Home Products and Rosh Ha'Ayin, Israel-based Zag could not agree on plans for integration and management. Zag mainly makes plastic housewares.
Tennant said Seymour ``provides significant material diversification and reduces [Home Products'] exposure to resin price volatility by 50 percent.'' In a telephone interview he said Home Products now is nearly entirely exposed to resin prices and eventually wants to reduce resins to 30-40 percent of material costs. He stressed, however, that Home Products will continue in plastics housewares and plans to grow in that area.
Home Products' Tamor Corp. and Selfix Inc. subsidiaries injection mold housewares and consumer goods. Like Seymour, they sell mainly to mass merchandisers. Home Products' Shutters Inc. subsidiary produces exterior plastic shutters.
The addition of Seymour should boost Home Products' sales to more than $240 million next year, Home Products estimated in a Nov. 11 news release.
Home Products expects to complete the Seymour deal by the end of the year. It will pay an undisclosed amount of cash, stock and assumed debt to private investment firm Chase Capital Partners. Seymour operates three plants in Seymour, Ind., where it has its head office, and a fourth in Reynosa, Mexico. Home Products' manufacturing facilities are in Chicago and Hebron, Ill.; Leominster, Mass.; Louisiana, Mo.; and Thomasville, Ga. Officials claimed Seymour dominates its laundry categories.
Seymour President and CEO Stephen Brian will continue in those roles. Seymour and Home Products are listed on the Nasdaq exchange.