Compass Plastics & Technologies Inc. is acquiring Gumsung Plastics USA in Mexicali, Mexico.
Gumsung is a contract manufacturer and assembler of injection molded television cabinets and computer monitors. Its annual sales are about $12 million, CPTI said.
Gardena, Calif.-based CPTI said Aug. 6 it has entered into an agreement in principle to acquire Gumsung's assets and operations and expects to complete the transaction in September. Terms were not disclosed.
Gumsung is a wholly owned subsidiary of Gumsung Plastics Ltd. of Kumi City, South Korea. Asia's widespread economic and currency crisis has prompted numerous South Korean companies to shed foreign assets.
In addition to the Mexicali operation, CPTI gains access to Gumsung's trading company, research center and mold-making and design capabilities, all in South Korea.
In Mexicali, Gumsung employs 180 and operates 16 Goldstar injection molding presses with clamping forces of 500-1,300 tons. Two facilities occupy 165,000 square feet. Gumsung opened the operation in 1995.
Gumsung's customers include LG Electronics, Acer, Daewoo, Sony and Samsung.
Hu Won Hong, now Gumsung Plastics USA's president, will continue as Gumsung's director of operations and will join CPTI's board of directors. ``We look forward to expanding the relationship between Compass and Gumsung Plastics Ltd. of Korea to develop business opportunities in other geographic locations,'' Hong said in a news release.
Custom molder CPTI makes enclosures, components and subassemblies for computer monitor, personal computer, printer, consumer electronics and medical device applications. CPTI facilities are located in Gardena; Tijuana, Mexico; and San Jose, Calif. CPTI had profit of $2.1 million on sales of $44 million for the year ended Oct. 26.
CPTI will integrate Gumsung into its AB Plastics subsidiary with the two businesses operating as separate divisions with centralized engineering, sales and finance, Michael A. Gibbs, CPTI president and chief executive officer, said in a news release.