A New York merchant bank has purchased New Jersey injection molder Sussex Technology Inc., in the first of what it says will be $100 million worth of investments in midsized plastics and rubber processors.
Saunders Karp & Megrue purchased all of Sparta, N.J.-based Sussex for an undisclosed price. During the next five years, SKM plans to double Sussex's number of injection molding machines to 40, and double sales from the $11 million expected this year.
SKM is in talks to invest in other plastics processors, and wants to buy mainly injection molders that make products for personal-care, medical/pharmaceutical and electronics applications, said Raymond Langton, president and chief executive officer of SKM Applied Technology Partners, the arm of SKM that made the purchase. The money is coming from a $500 million SKM fund.
ATP is a partnership of SKM, Langton and merchant bank W.E. Myers & Co., but most of the funding comes from SKM, officials said.
The venture wants to expand Sussex's products to include plastic caps and closures and birth-control dispensers, and look for other firms to form a critical mass in the personal-care and medical markets, Langton said. The investors also will consider automotive and aerospace firms.
Sussex's management, including President Richard McKinnon, will stay and run the firm on a daily basis, but Langton said he will help with long-term strategy.
The investment venture is attracted to plastics because it is a fragmented industry—outside of beverage or automotive processors—and has strong profit margins and growth potential, he said.
Sussex is SKM's first plastics purchase, but it manages $800 million in equity capital invested in more than 40 concerns, including apparel fabrics firm Duro Industries.
Langton formerly was chief operating office of SKF North America, a $1 billion-a-year bearing and seal maker.