Acquisition-minded StackTech Systems Inc. intends to purchase another mold-making firm, Unique Mould Makers Ltd., which manufactures tools for caps and closures.
Unique, based in Toronto, gives StackTech its third tooling shop and makes it one of the largest injection mold makers in North America. The holding firm also owns Tradesco Mold Ltd. in Rexdale, Ontario, and Fairway Molds Inc. in Los Angeles.
The deal, expected to close the week of June 7, brings StackTech's staff to 340 and its annual sales to about US$55 million, said David Brown, chief executive officer of StackTech and president of Tradesco. Rexdale-based StackTech is trying to create a mold maker with a critical mass to serve large customers, and one with more leverage to secure loans for new equipment, Brown said.
The company plans to spend $4 million in the next two years for new equipment and more space for Unique, Brown said. It has spent $7 million upgrading Tradesco and $2 million on Fairway since purchasing it last year.
Tradesco specializes in thin-wall containers, a natural fit with Unique's specialization in caps and closures, Brown said. Fairway does complex molds for products such as razors and trigger sprays, he said.
Werner Scheliga, Unique chairman and chief executive officer, said his firm needed more capital to grow.
``The profit for mold makers is notoriously small, and that margin restricts you with investments,'' he said. ``In order to move forward with shorter deliveries [and] lower cost, the only way you can do that is with new technology.''
Unique will be managed locally, like the other two firms. StackTech provides some joint marketing, and the firms trade technology.
Brown said Scheliga, who founded Unique in 1969, will remain with the company for a short time; Unique then will be run by the rest of the current management team. Those managers will be given an equity stake in Unique, Brown said.
``We don't want to see any dilution of the technical aspects,'' Brown said.
StackTech has other acquisition plans that include establishing a location in the east or southeast United States, and buying an injection toolmaker with knowledge of cutlery and housewares, Brown said. The company also wants to buy manufacturers of blow molding and thermoforming tools, he said.
The company still is interested in a European acquisition, but is more focused on North America, Brown said.
StackTech is a holding company set up by New York merchant bank Castle Harlan Inc., a majority owner of Tradesco, after it bought Fairway. Tradesco accounts for about $25 million in sales, while Fairway has about $18 million and Unique $12 million.