Rexam plc is reinforcing its place in the U.S. beauty packaging market with the acquisition of innovative makeup-compact injection molder Sussex Plastics Inc. of Sussex, Wis.
London-based Rexam announced it has agreed to pay £19 million ($30.9 million) in cash for Sussex, which had custom injection molding sales of £18.5 million ($30.3 million) in 1997.
``Sussex is a good bolt-on for our beauty packaging sector. It brings not only product complementarity in the United States, but also excellent skill levels and a culture of innovation,'' said Rexam Chief Executive Officer Rolf Borjesson.
Sussex Plastics, with one plant close to Milwaukee, molds a range of health and beauty, industrial and medical products. It operates 51 injection presses ranging from 55-725 tons, 70 percent of which are Van Dorns, with several from HPM and Milacron, according to Sussex sales and marketing director Mike Katz.
According to Rexam, Sussex won Supplier of the Year awards from four customers in 1997. Rexam officials said the acquisition will help the London company broaden its makeup range in North America.
About 90 percent of Sussex's sales are to the U.S. market, and more than half of its business is devoted to cosmetic products, the lion's share of which are compacts, Katz said. The firm molds the cosmetic products in ABS and styrene acrylonitrile blends along with polystyrenes.
However, Sussex remains a diverse molder with a quarter of its output industrial components, including waste water pump housings and light and fan fittings, he explained.
``We consider our market diversification as core for us. Cosmetics is a market up and down for us,'' Katz said.
He said the deal was attractive to Rexam since it does not produce compacts in the United States.
Sussex has a number of patented processes and products. Recently it patented a hermetically sealed compact designed to keep makeup moisture inside.
The firm also has adopted a unique approach to the problem of protecting compacts from scuffing in handbags, Katz said. Instead of ultraviolet coating, Sussex has used a proprietary blend of resins for ``a tenth of the price'' of coating, he said.
Under the takeover agreement, Sussex Plastics' current CEO and part-owner Lorand Spyers-Duran will continue as CEO during the transition of the U.S. firm into Rexam's beauty packaging division, according to a Rexam news release.