Broadening its composites business, EDO Corp. acquired Specialty Plastics Inc. on Dec. 22 for $5.4 million in cash and assumption of about $700,000 in bank debt.
Specialty Plastics employs 80, occupies a leased 60,000-square-foot facility in Baton Rouge, La., and has current annual sales of about $8 million.
Specialty Plastics founder Richard Lea continues as a consultant with the designer, manufacturer and installer of lightweight fiber composite pipe for use on offshore deep-water oil production platforms.
Lea formed Specialty Plastics in 1972 and was its president and principal shareholder until the sale.
This ``small niche acquisition'' leverages EDO's filament-wound composites business experience, Peter Arment said by telephone. Arment is an aerospace analyst with JSA Research Inc. in Newport, R.I.
``Specialty Plastics has a strong trade name, Fiberbond, in the oil industry,'' Arment said.
Fabricators of offshore platforms frequently specify the Fiberbond bonding process for connecting filament-wound pipe.
Composite pipe with stronger structural characteristics is replacing heavier metal pipe in certain oil rig applications, such as fire deluge water systems, according to William Frost, EDO's vice president of administration.
The operation reports as a separate profit center, now known as EDO Specialty Plastics, within EDO's Salt Lake City-based Fiber Science business unit.
Currently, the Fiber Science unit makes composite water and waste tanks for commercial aircraft — with Boeing Co. as a key customer — and composite pressure vessels for use as air-start reservoirs on large trucks.
New York-based EDO reported profit of $2.8 million on sales of $23.2 million for the third quarter ending Sept. 26. Arment said EDO's 1998 sales will be ``essentially flat'' at about $95 million, and he forecasts next year's at $105 million, excluding the acquisition.
Military work accounts for two-thirds of the company's business and involves mechanical, electro-mechanical and acoustical systems.
Advanced electro-optical systems for satellite and aerospace applications, mostly commercial, accounted for 22 percent of EDO's 1997 sales.