A management-led buyout of Spartech Corp.'s Canadian molding assets has given birth to a new injection molding company.
Plastipak Industries Inc. will be based in Brampton, Ontario, and operate an office in Montreal, Normand Tanguay, the new firm's president, said in a telephone interview. Tanguay and three other former Spartech Canada executives led the US$25 million buyout of three molding plants.
Plastipak operates a custom injection molding plant in Brampton and thin-wall container injection molding plants in Toronto and Cookshire, Quebec. The businesses generated sales of about US$35 million last year.
Bradley Buechler, Spartech chairman, president and chief executive officer, said the businesses are not strategic to the Clayton, Mo.-based firm, and the sale will provide cash flow Spartech can use for its core businesses of extruded sheet and color and specialty compounds. The publicly traded company completed the sale Aug. 9. Proceeds were about US$23 million in cash and a US$2 million interest-bearing note.
Spartech also said it is continuing a cost-cutting program and soon will close three undisclosed facilities. The closures and other streamlining measures will be complete in 90 days and will lead to annual pretax savings of about US$3 million, Buechler predicted in a news release. The firm took a nonrecurring expense charge of US$9 million related to the cutbacks in its third-quarter results.
Spartech bought the three Canadian molding facilities a few years ago to diversify. Its other Canadian operations include sheet extrusion plants in Granby, Quebec, and Cornwall, Ontario, a compounding plant in Stratford, Ontario, and a small compounding operation in Montreal.
Plastipak executives include Yves Gosselin, vice president and chief operating officer; Guy Bellemare, vice president and chief financial officer; and Bob Connolly, vice president and chief development officer responsible for sales, marketing and research and development.
Tanguay said Plastipak will continue to focus on injection molding and packaging. It plans to diversify its custom molding client base.