Mikron Industries Inc. is working on an acquisition that could solidify its position as the largest U.S. extruder of window profiles.
Kent, Wash.-based Mikron announced April 15 it was negotiating to buy competitor Spectus Systems Inc. of Winnebago, Ill.
If a deal is finalized, Mikron in one swoop will increase its profile sales by $26 million, based on 1997 sales information provided by Spectus. That boost, combined with a doubling of extrusion lines at Mikron's Richmond, Ky., facility in early 1997, could push Mikron's annual sales to an estimated $130 million.
Only Royal Group Technologies Ltd. of Woodbridge, Ontario, sells more window profiles from North America, with an estimated $198 million in 1996 sales.
``PVC window and door profile extrusions are an absolute key business for us,'' Mikron Chief Executive Officer Paul Warner said in an April 16 telephone interview.
While a deal to acquire Spectus would not make Mikron the largest window profile extruder in North America, Warner asserts Mikron ``is working at it.''
``The key is to stay profitable,'' he said, adding that his company will ``take a look around'' after Spectus is integrated into Mikron, assuming a deal is done.
A Mikron-Spectus union would be a good fit, Warner said, because the companies generally have different customer bases.
``Mikron over the years has been heavily weighted toward the new-construction and manufactured-housing side of the business,'' Warner said. ``The replacement business has been Spectus' strength. Frankly that's the attraction for us.''
Spectus' U.S. window profile business has been about 65 percent remodeling and replacement and 35 percent new-construction markets, said Paul Chapman, president of Spectus Systems Inc.
``There are some good fits between our companies,'' Chapman said.
Spectus Systems' parent company, Mottram Group plc of Macclesfield, England, already has announced the sale of some of its British-based subsidiaries — including Spectus Systems Ltd. — to Heywood Williams plc of Huddersfield, England.
That deal is pending shareholder approval, Chapman said.
Approval for the United Kingdom deal could come April 27, he said.
Spectus has helped spur more innovations in the market than its size would imply.
The company has been a supplier to traditional wood-window producers that added vinyl products .
Spectus, which uses ABS as a unique plasticizing agent for its PVC, also is among the leaders in painting, bending and laminating vinyl profiles.
Recently Spectus expanded sales into Central and South America, Chapman said.
``We are more systems-oriented as opposed to a trade or custom extruder,'' Chapman said.
Heywood Williams, the British building products and automotive glass giant, already owns extruder Bristolpipe Corp. of Elkhart, Ind., and its subsidiary, Columbia Pipe Inc. of Columbia, Tenn.
But the U.S. residential window business may not be as appealing as its European counterpart, Warner said.
``The U.S. market is a whole lot more difficult,'' Warner said. ``There are a lot more difficult dies and profiles to run. To do business in the U.S., you better be good at making dies.''
Mikron makes dies at its Kent facility and runs profiles in Kent and in Richmond.
The company will own an estimated 100 extrusion lines split among three plants if Mikron buys Spectus.
In addition to its plant in Winnebago, Spectus operates a distribution facility in Rockford, Ill., as well as one in New Jersey, Chapman said.