ANAHEIM, CALIF. — Medical instrument manufacturer UTI Corp. has expanded beyond its metals focus by buying its first plastics molder, American Technical Molding Inc., and plans additional plastics acquisitions.
UTI made the acquisition in late December but has not announced it publicly because of the "quiet period" associated with its initial public offering, said William Gaffney, vice president of marketing with Collegeville, Pa.-based UTI. The company disclosed the purchase at the Medical Design & Manufacturing West show, held Jan. 8-10 in Anaheim.
ATM in Upland, Calif., wants the financial resources that UTI brings and was getting pressure from some customers who worried whether the relatively small molder could compete in the increasingly consolidated manufacturing marketplace, said Walter Gacek, technical sales and marketing manager with ATM.
ATM operates 32 injection presses with clamping forces of 30-300 tons and has annual sales between $10 million and $15 million. It employs 100.
"There is a trend in the plastics industry toward consolidation," Gacek said. "This is really a good match. This isn't a group of financial people who want to buy us for the money. It is metals people who want to add plastics."
UTI officials declined to comment until the company completes its IPO, but the IPO registration it filed with the Securities and Exchange Commission said additional expansion is planned.
"In particular, we intend to pursue targets that provide plastic molding, metal molding, design and clean room assembly capabilities," the firm said.
UTI's now-combined units, which have eight factories in the United States and two in Europe, had sales of $94.8 million and posted losses of $2.7 million in the first nine months of 2000, according to SEC filings. The company said it expects to raise $91 million in its IPO.
UTI began in the 1940s as a metal tubing maker but has expanded rapidly through acquisitions since July 1999, when KRG Capital Partners Inc. invested in the firm. Other UTI units are involved in forming and drawing of tubes, laser welding, metal machining and assembly of metal and plastic components.
The purchase also moves one of ATM's owners out of the picture.
Jack Kelley, who also owns JK Molds Inc. in Upland, started ATM in 1988 with Rocky Morrison, who handled plastic tooling purchases for medical original equipment manufacturers before branching out on his own. But Kelley has been bought out and will not have any management role in the new ATM, while Morrison will remain with the company, Gacek said. No changes in personnel are planned at ATM, Gacek said.
UTI made an offer to purchase JK Molds, but Kelley declined to sell, according to Tony May, technical sales engineer with JK.