Low & Bonar plc is expanding its North American rotational molding business with the acquisition of sister firms PDM Molding Inc. of Littleton, Colo., and PDM Molding NW Inc. of Vancouver, Wash.
The deal will make Dundee, Scotland-based Low & Bonar the second-largest custom rotomolder in North America, it claims, and will reinforce ``its position as the largest producer in this industry on a worldwide basis.''
L&B agreed to make an initial cash payment of about $15.7 million, plus $2 million for each company, depending on certain undisclosed conditions.
PDM Molding Inc. employs 65 at the Littleton plant, which runs five rotomolding machines producing a range of custom molded parts and products for the toy, industrial tank, automotive, aerospace, liquid waste and recreational goods markets. It processes 1.9 million pounds of polyethylene, polypropylene and nylon resin annually.
Its sister plant in Ridgefield, Wash., employs 75. The plant also runs five machines molding a similar range of products as well as items for the point-of-purchase, indoor recreation and sporting goods sectors. The facility processes 1.8 million pounds of PE per year.
Together, the sister firms, established and owned by the Giacchino family, recorded operating profit of $1.3 million in 1998 on rotomolding sales of about $10 million.
L&B's subsidiary Bonar Plastics Inc. of Newnan, Ga., already operates 30 rotomolding machines producing a range of industrial containers and parts at three plants in North America: West Chicago, Ill.; Tualatin, Ore.; and Lindsay, Ontario.
Bonar closed a fourth rotomolding factory, in Newnan, a few weeks ago and dispersed the equipment to the plants in West Chicago and Lindsay.
L&B also announced plans to relocate its Oregon operation to PDM Molding NW's newer Ridgefield plant.
``Low & Bonar anticipates that this will result in cost savings of approximately $1 million per annum across the combined operations,'' L&B said in a news release.
The deal follows L&B's recently stated policy of expanding operations geographically both in Europe and North America in rotomolding, which it considers a higher-margin business. Late last year it acquired a small Italian plant, Spila srl of Bologna, to join its recently added rotomolding operations in France, Denmark and Spain.
Bonar Plastics, which employs 315 in rotomolding, makes a range of industrial containers and other products with annual throughput of 18.5 million pounds of PE and PVC resins.
Bonar ranked seventh in Plastics News' 1998 survey of North American rotomolders with sales of $43 million. The PDM companies ranked together at the 27th position.