Woodbridge Foam Corp. is diversifying its automotive impact-protection technology by acquiring PFB Corp.'s Morval Division. Morval makes expanded polypropylene and expanded polystyrene energy-absorption products. Woodbridge is a major in polyurethane energy-absorption protection through its Enerflex business.
Woodbridge of Mississauga, Ontario, agreed to buy Morval for about C$17 million (US$11.7 million) in cash. Morval represented about 30 percent of PFB's 1999 sales, PFB said Feb. 8. PFB had sales of C$35.6 million (US$24.6 million) for the nine months ended Sept. 30.
PFB of Calgary, Alberta, will focus on its main business of expanded foam products such as EPS for construction. It started Morval, based in Kitchener, Ontario, in 1996 to capitalize on emerging markets for side-impact-protection materials among automakers.
Auto energy-management markets are competitive. PU, expanded thermoplastic beads, ribbed plastics and expanded metals vie for market share, according to Keith Osborne, vice president of Woodbridge's Enerflex business. He declined to estimate the market's value in North America.
Osborne said demand for side-impact energy-management products is stabilizing, but regulations for offset impacts and head impacts promise continued growth for crash-protection products among automakers.
He would not disclose Woodbridge's Enerflex sales but said they are larger than Morval's auto-protection sales.
"Acquisition of PFB's Morval division is a key component in Woodbridge Foam Corp.'s strategy to grow its energy management division," Osborne said.
PU is preferred in some impact applications, whereas expanded thermoplastics make more sense in others, he added. Morval and Enerflex have a similar customer base, mainly Tier 1 suppliers, according to Osborne.
The companies expect to finalize the deal about March 31.
Woodbridge Group of Troy, Mich., the parent company of Woodbridge Foam, had 1998 sales of $740 million, according to Crain's Detroit Business.
Osborne said his company will continue and expand Morval's other business, expanded thermoplastic foam packaging for auto dunnage, appliances, electronics and other industries. He said the business builds on the Kitchener plant's auto applications in terms of technologies and production equipment.
PFB will retain its stake, for a short while at least, in auto toolmaker Hallmark Technologies Inc., said Dan Stearne, PFB executive vice president.
PFB acquired 19.8 percent of the Windsor, Ontario, firm last year to gain mold-making expertise for PFB's auto impact products business.
Stearne said his company will evaluate that holding's status over the long term.