CHICAGO — In a move that shook up the North American thermoforming equipment industry, Brown Machine LLC (Booth S1459) and Lyle Industries Inc. (Booth N9021) announced Monday that the two former competitors are merging.
The deal will be finalized by the end of the week, said Brown President Karl Alleman.
Alleman said both Brown and Lyle had visions of becoming the most dominant thermoforming machinery force in North America and began exploring the merger months ago.
"Our strategic goal is to grow our business aggressively, and we've been doing a number of things internally — but we've also been looking for joint ventures," he said. "Fortunately Lyle was thinking about the same thing.
"It was a real good meeting of the minds."
Brown and Lyle will have some overlap in business, but each company also supplements the other, Alleman said.
Lyle has made a name for itself as a manufacturer of roll-fed machines to thermoform food packaging. Brown also makes roll-fed formers, but its strongest business is in cut-sheet equipment for industrial and large-part thermoforming applications.
In addition, a recent sales agreement between Lyle and Gabler Maschinenbau GmbH of Lubeck, Germany, opens up an entirely new customer base for Brown.
Under the deal, Lyle was made Gabler's U.S. representative for its popular trim-in-place technology including specialty equipment for forming ever-growing polypropylene packaging applications.
On the other hand, Brown's reputation in manufacturing lip-roller equipment will benefit customers of the former Lyle.
Now, Alleman said, not only will customers of each company continue to get the same service, but more of it.
"For example, we're combining the two engineering departments," he said. "When you put those strengths together, one plus one equals three — not just two."
Brown was founded in 1952 in Beaverton, Mich. Lyle surfaced 10 years later in the same town. The companies have a long history of competing in the close-knit thermoforming machine market — Alleman said Lyle's ambition attracted his company as a potential partner.
"We wanted to join forces with somebody that was a strong company. They share the same passion for this industry," Alleman said. "We didn't want to join up with somebody who wants to sell out their business and move on."
The new company, which will completely integrate the two existing firms, does not have a name yet. However, both facilities will operate separately at each Beaverton location, which are just a few miles apart, Alleman said.
Gary Sowden, Lyle's director of marketing, said both companies need their current production capacity.
"We're both so busy, we can't put their plant into ours, or our plant into theirs," he said.
Alleman will become chief executive officer of the new company. Lyle President Gerry Schwartz will be named president of continuous roll-fed machines.
Alleman would not provide employee or sales figures for either privately held company. Industry sources said the combined companies could have total sales of more than $50 million.
At NPE, Lyle and Gabler are sharing a booth in the lower-level of the North Hall. Crews scrambled to put up Brown Machine signs at the booth before the show started Monday.
Brown Machine is owned by Madison Capital Partners, a Chicago investment firm.
The thermoforming equipment industry has been consolidating in the past few years.
Late last month, thermoforming giants Irwin Research & Development Inc. (Booth N7101) and ISAP OMV Group SpA of Verona, Italy, formed a 50-50 venture with plans to build new headquarters in Yakima, Wash., headquarters for IRD. OMV subsidiary OMV USA Inc. is exhibiting at Booth E11147.