MIAMI — Becoming a financier to plastics companies was never the intention of equity investment fund Trivest Inc.
Yet, the 20-year-old company has amassed an impressive portfolio of processors through the years. It currently owns stakes in five plastics players, part of its 14-company investment chart.
Miami-based Trivest has kept the revolving door spinning as it buys and sells plastics companies.
Several processors have been cast off after accomplishing growth under Trivest. The company also provided the financial backing behind the cobbling together in December 1999 of six packaging companies under the name Plassein Packaging Corp.
But plastics was never particularly in the company's schema to fatten its investment funds, said Managing Director William Kaczynski Jr. Instead, Trivest goes after whatever companies might bolster equity returns to shareholders, he said.
"We'd never say we've got a global plastics strategy," Kaczynski said in a Feb. 9 interview at Trivest offices in the Coconut Grove section of Miami. "We approach it as being a buyer of good companies. They've just tended to be plastics, in some cases, and we've built a track record there."
Many companies in the Trivest stable have nothing to do with plastic. They include an aviation services company, a designer of car-security systems and a maker of knit shirts and leisurewear.
But Trivest also has an ownership grip on publicly held film and sheet producer Atlantis Plastics Inc., cutlery maker Jet Plastica Industries Inc., plastisol maker Rutland Plastic Technologies Inc. and Plassein.
And, in January, it picked up rotational molder Superior International Industries Inc., a Carrollton, Ga.-based maker of playground and park equipment.
Trivest has a controlling interest in all those companies except Atlantis, where ownership is more diluted. But Trivest has not taken a management role in any of the firms. Instead, Trivest lets industry veterans steer the rudder, while Trivest looks for its return.
"We're not operations managers," said Peter Vandenberg Jr., another Trivest managing director. "We have no other leverage than making certain the company is bigger and better after the transaction is done."
A case in point: Plassein hired Frank McNabb as its president and chief executive officer. McNabb had spent close to 20 years at Union Carbide Corp. and then helped create First Brands Corp., the former producer of Glad trash bags.
Yet, Trivest played another behind-the-scenes role in that company's foundation. Last August, Plassein added a sixth company, Thomasville, N.C.-based Rex International Inc., a company that already had been backed by Trivest management.
While the other five members of Plassein offer products in disparate areas of the packaging business, Rex — a maker of shipping sacks and specialty and stretch film — worked with many of them.
"It added some glue to the group," Kaczynski said. "The other five companies were maybe too diverse. There were lots of opportunities but no real synergies as they existed."
Plassein is considering adding one or two more companies, creating a larger packaging player, Kaczynski said. Plassein's sales expect to reach about $180 million in 2001, up from $115 million during its first full year in 1999.
What the company calls "add-ons" also could be in the cards at Superior. That company is negotiating to buy two other companies making similar playground-equipment products, said Trivest managing director Derek McDowell.
Those deals could close within several months, layering operations onto that of Superior's to create a large rotomolder, he said.
Trivest, founded in 1981, currently manages a $300 million equity fund that includes many of its plastics company investments. The fund has 30-40 private investors, Vandenberg said.
The company is run by Chairman and Chief Executive Officer Earl Powell, a former partner at KPMG Consulting Inc. A majority of the 13 staff members are certified public accountants, and many have backgrounds managing bank or private equity investments.
Trivest also operates a loan side to its business. That came into play with publicly held Atlantis, acquired by Trivest in 1987. The sheet and film producer has struggled lately, ending 2000 with sales down about 1.5 percent and profit tumbling 97 percent from the year before.
Trivest operates a $30 million revolving credit line with Atlantis to fuel growth. The available credit helped Atlantis in December purchase Extrusion Masters Inc. of Elkhart, Ind., a maker of extruded parts for recreational vehicles.
Atlantis President and Chief Executive Officer Anthony Bova blamed lower profit margins — some of which came from increased polyethylene prices — and a softening economy as contributing factors to the downturn.
"It was a challenging year," said Bova during a Feb. 5 conference call with analysts. "We believe [the third quarter] was a bottoming out in profitability. But we're encouraged by a number of factors."
The Atlanta-based company, which once rented executive offices from Trivest in Miami, started a stretch film plant in Fontana, Calif., in February and plans to launch a multilayer cast extrusion line in Mankato, Minn., in late March, Bova said.
The Fontana plant could add as much as 17 million pounds of capacity, some of it from a multilayer, coextruded cast line, Bova said.
By adding the West Coast capacity, Trivest should have a better year in 2001, Vandenberg said.
Atlantis had hired investment banker Bowles Hollowell Conner in 1999 to explore a possible sale. But officials decided to end the search and focus instead on growing Atlantis internally, Vandenberg said.
"We want to give Atlantis more attention," he said. "We're optimistic that it will do very well."
No matter how Atlantis performs, Trivest almost certainly will divest one or two properties in the next 18 months, Vandenberg said. The investor group studies the economic cycles of companies and determines which ones will be good sale candidates, based on growth and investor value.
Last year Trivest sold off Penda Corp., a thermoformer of pickup-truck bedliners, before buying another processor, Superior, to add to its portfolio.
Typically, Trivest looks for businesses that can grow to $200 million to $500 million in annual sales, Kaczynski said.
Even with the economy sloping downward, opportunities remain for acquisitions, Van- denberg added. But the company did not expect the same level of large deals to consume investment firms as in years past.
"There are always good companies that would like to be sold," Vandenberg said. "But for us to be interested, they must grow in dollars and multiply our initial investment. That's the first priority."
