Graham Group will expand and diversify its plastics stake in a joint takeover of Western Industries Inc.
Graham and investment capital firm Brera Capital Partners LLC plan to team up to buy Western, a custom molder and metal fabricator based in Milwaukee. They expect to complete the deal by late spring or early summer for undisclosed terms. Western now is owned by Exor Group, an international holding company with an office in New York. Exor is part of Agnelli Group of Luxembourg.
``Our objective is to accelerate the growth of Western as a leading outsource manufacturer in North America in several business segments that are being driven by global competitive forces to convert from the use of high-cost, captive manufacturing operations to lower-cost, external subassemblers,'' Donald Graham, Graham founder and chairman in Philadelphia, said in a news release.
The new, 50-50 owners also plan to boost sales of Western's branded and private-label products through mass merchandisers.
Graham is a minority partner in Graham Packaging Co. LP, a major bottle blow molder based in York, Pa. Investment capital firm Blackstone Group of New York acquired a majority interest in Graham Packaging last year, and provided capital to help the firm grow. Donald Graham owns blow molding equipment maker Graham Engineering Corp. of York.
Graham Group brings operating experience to Western, and Brera has capital and management expertise, said Terry Brennan, Western's senior vice president and chief financial officer.
Like Graham Packaging, Western locates some plants within or near major customers' operations to improve manufacturing and delivery efficiency, said Graham spokeswoman Christina Morin.
Western's annual sales are about $250 million, of which ``a very significant'' part is plastics related, said Morin. Western's Freedom Plastics division, acquired last year, custom injection molds at plants in Joliet and Sheffield, Ill. Western does custom injection and large-part blow molding in Chilton, Wis., and large-part blow molding in Winfield, Kan. It acquired the latter facility in 1996 when it bought KSQ Inc.
Western also runs five metal fabrication plants. Its main markets are appliance, recreation, lawn and garden, agricultural and construction industries.
Brera of New York is a private equity firm managing a $650 million equity fund.