Fast-growing Morton Industrial Group Inc. has agreed to acquire three plastics processing plants from Worthington Industries Inc. and two finished machine parts units from Midland Partners Inc. Terms were not disclosed.
The Worthington deal involves nonautomotive operations making injection molded and thermoformed parts at facilities in the Southeast.
The acquisitions will reduce Morton's reliance on original equipment manufacturers Deere & Co. and Caterpillar Inc.
The two companies accounted for 84 percent of Morton's sales for the nine-month period ended Oct. 3.
``Worthington does not do a large percentage of its business with our current customers,'' Thomas D. Lauerman, Morton vice president of finance and treasurer, said in a telephone interview.
The plants in Harrisburg, N.C.; Lebanon, Ky.; and St. Matthews, S.C., are part of Worthington's custom plastics subsidiary. The operations employ 1,200 and had 1998 sales of more than $100 million.
The acquisition ``significantly diversifies Morton's existing customer base and gives us an enhanced presence in the plastics business in the emerging Southeastern markets,'' William D. Morton, chairman, president and chief executive officer, said in a news release.
Columbus, Ohio-based Worthington retained investment bankers last spring to explore how to maximize the value of the plastics business and two other subsidiaries outside its core steel processing and metals businesses.
``We have nearly completed our divestitures,'' John P. McConnell, Worthington chairman and CEO, said in a news release.
Worthington still owns a large piece of its plastics unit. Still for sale are Ohio plants in Mason, Salem and Upper Sandusky that make plastic parts primarily for the automotive industry and have sales of more than $200 million, Todd Rollins, manager of investor relations, said in a telephone interview.
In November, Worthington sold its 60 percent interest in a smaller plastics operation, London Industries Inc. of London, Ohio, to its joint venture partner, Nissen Chemitec Corp.
Worthington reported profit of $118.4 million on sales of $1.6 billion for the year ended May 31.
The Midland deal includes Illinois Machine & Tool Works of North Pekin, Ill., and MC Products LLC of Galesburg, Ill. Those divisions of Galesburg-based Midland employ 150 and had 1997 sales of about $17 million.
Morton Industrial Group anticipates its annualized sales will approach $300 million once the transactions close, probably in several weeks. The Morton, Ill.-based firm had profit of $1.7 million on 1998 sales of $151.2 million from contract manufacturing for construction, agricultural and industrial equipment makers primarily in the Midwest and Southeast.
Morton plans to establish a custom plastics subsidiary for the Worthington plants and a contract machining division for the Midland properties.
Morton formed a contract plastics division following its 1998 acquisitions of Mid-Central Plastics Inc. of West Des Moines, Iowa, and Carroll George Inc. of Northwood, Iowa. Paul Schmitz, the division's vice president and general manager, also will oversee the plastics subsidiary.
The firm's largest operation, Morton Metalcraft Co., was formed in 1963. In January 1998, Morton Metalcraft Holding Co. merged with publicly traded MLX Corp. of Atlanta. The surviving corporation changed its name to Morton Industrial Group Inc.
On Sept. 10, Morton was listed on the Nasdaq Small Cap Market after a previous listing on the Nasdaq over-the-counter bulletin board.