Plastics extruder Hahn Elastomer Corp. has purchased two companies to provide it with needed room to grow. The Plymouth, Mich.-based firm bought profile and tubing extruders Atrex Inc. of Warren, Mich., and Plastigage Corp. of Jackson, Mich., for an undisclosed amount Feb. 24.
"In this facility, we really can't grow a whole heck of a lot," David Krajovic, Hahn's chief financial officer, said in a telephone interview. "We either had to build a new facility or find someone to partner with.
"[Atrex and Plastigage] have the extra capacity and we can help them grow just as well."
It is a nearly perfect opportunity for Plastigage, said Mira Miller, vice president of sales and marketing. The business has nearly 100 employees and 16 extrusion lines, but did not have the engineering edge it needed to grow, Miller said.
"This is a move that was needed," she said. "For the people, especially, and the company, this is the best thing that could have happened.
"Now we have a company that believes in technology and believes in us," she said. "It's put some new blood in our system."
The acquisitions come as Hahn hopes to roll out a coextruded thermoplastic elastomer foam designed to seal the hood and windshield on cars. Currently, a rubber and metal seal is used on most U.S. cars.
Hahn has an American license to use the TPE foam developed by Tokiwa Chemical Industries Co. Ltd. of Inba-Gun, Japan. The system already is on 1 million Japanese cars and undergoing tests with an unspecified North American automaker now.
"It has a tremendous opportunity," Krajovic said. "It's going to have a great impact."
Hahn had about $23 million in sales last year and anticipates $27 million on its own this year, he said. About 60 percent of its business is in the automotive industry. It also extrudes a corrugated dust boot cover for a variety of appliances and turns out plastic trim for office cubicles.
Atrex, Plastigage and Hahn sometimes came up against each other in the marketplace, but working together, the businesses can build on each other's resources, Krajovic said.
"These other companies have customer contacts we didn't have, but didn't have the technology we have," he said. "I'm pleased to see we're able to cross-pollinate as much as we have."
The buyout is the second in five years for Atrex, which was founded in 1969. In 1995, NYX Inc. of Livonia, Mich., bought the company and ran it as a subsidiary until selling to Hahn.
Plastigage reported 1998 profile and tubing sales of $8.9 million, while Atrex had $10.2 million. Atrex and Plastigage will retain their names, Krajovic said.