Spartech Corp. has bolstered its market share in glycol-modified PET sheet by acquiring Lustro Plastics Co. for $10.4 million. Spartech already has plans to upgrade equipment at Lustro.
``We do very little in the PET market and we were looking to expand it,'' Spartech President and Chief Executive Officer Bradley Buechler said in a telephone interview.
PET represents only about 2 percent of the 500 million pounds of material that Spartech Plastics, the company's extruded sheet and roll-stock division, uses every year. More than 95 percent of Lustro's sheet and film are made using PETG.
``This complements our PET and will allow us to add more volume in the packaging, graphic arts, or point-of-purchase, and distribution markets,'' Buechler said.
Lustro operates one plant in Evanston, Ill., with six extrusion lines. Spartech expects to retain all 125 employees.
``We currently plan to upgrade Lustro's manufacturing equipment and put additional capital into their facility during the next 12 months,'' David Mueller, Spartech executive vice president and chief operating officer, said in a news release.
The investment of $1.5 million to $2 million will involve replacing some existing lines with newer equipment, Buechler added.
With annual sales of about $28 million, Lustro also serves the electronic and medical packaging markets. The Evanston facility will be added to Spartech Plastics' existing 17 plants.
The sale was completed Jan. 7 and financed through Spartech's existing bank credit facility. It will be accretive to Spartech's earnings per share immediately.
Spartech Plastics employs about 1,600 and operates nearly 100 sheet production lines. The firm uses about 500 million pounds of ABS, polystyrene, polyethylene, polycarbonate, acrylic and PET to make sheet and film for industries ranging from food packaging to appliance, automotive and marine products.
The firm had sales of $432.2 million for the year ended Nov. 1, 1997, placing 12th in Plastics News' 1998 film and sheet ranking.
Spartech Corp. operates three divisions. Spartech Plastics makes up about 62 percent of the company's $675 million in total sales. Spartech Polycom, the compounding and color segment, holds 30 percent and the remaining 8 percent falls within Spartech's molded and profile products group. The firm runs 39 facilities in North America and Europe with 2,800 employees and has annual capacity of more than 1.1 billion pounds.