CHICAGO (June 26, 3 p.m. EDT) — In a move that shook up the North American thermoforming equipment industry, Brown Machine LLC and Lyle Industries Inc. announced that the two former competitors are merging.
Brown President Karl Alleman said both Brown and Lyle had visions of becoming the dominant thermoforming machinery force in North America, and began exploring a 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," Allenman 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 integrate the existing firms completely, does not have a name yet. However, each facility will operate separately at each Beaverton location, which are just a few miles apart, Alleman said.
Gary Sowden, Lyle's marketing director, 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 each privately held company. Industry sources said the combined companies could have total sales of more than $50 million.
At NPE, Lyle and Gabler shared 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.
Brown Machine is owned by Madison Capital Partners, a Chicago investment firm.
The thermoforming equipment industry has been consolidating in the past few years. In late May, thermoforming giants Irwin Research and Development Inc. and ISAP OMV Group SpA of Verona, Italy, formed a 50-50 venture with plans to build a new headquarters in Yakima, Wash., for IRD.