Pechiney Plastic Packaging Inc. has purchased Phoenix Health Care Products LLC, a long-time converter of coated medical films, and it will set up a separate coating division at the Phoenix location.
The acquisition, completed Feb. 4, will help Chicago-based Pechiney Plastic grow its health-care business, which accounts for about a third of its sales, and expand capacity, said spokesman Mark Lindley.
Initially, Pechiney will work from a 90,000-square-foot portion of Milwaukee-based Phoenix Health's headquarters plant. Pechiney will take over the entire 200,000-square-foot building in two years, said Phoenix Health Chief Operating Officer Scott Fredrick, who will remain with the company.
Phoenix Health, founded in 1892 by the Wordingham family, decided to sell the family business to enhance the product line and gain access to more film-based technology, Fredrick said.
The recent trend toward consolidation and downsizing in flexible packaging also played a role, he said.
``The industry is consolidating, and there should probably be four or five larger companies in the medical-device business who are dominant,'' Fredrick said in a Feb. 5 telephone interview. ``That's a trend we had to consider.''
The industry continues to shift. In late January, Tyco International Ltd. of Pembroke, Bermuda, said it would sell its plastics business, including its large flexible packaging operations. Other large companies, including Pechiney, have been on acquisition sprees.
Phoenix Health has annual sales of $15 million to $20 million and about 70 employees, all of whom Pechiney will retain, Fredrick said.
The Phoenix owners will continue to manage two other companies, not part of the sale to Pechiney, that make specialty metal housings for lighting and welding-rod ovens.
Those operations, currently on the Milwaukee site, will move after two years and allow Pechiney to expand there, according to Fredrick.
Pechiney will use the facility to coat and print specialty film for medical applications, using film from other Pechiney plants, Fredrick said. Phoenix Health has three printing and laminating lines to help manufacture roll stock for a variety of medical applications, including sterilized packaging for wound dressings, sutures, surgical gloves and gowns, syringes and thermometers.
It also produces pharmaceutical packaging, especially for transdermal applications and medicated pads. The Milwaukee company purchases coextruded film from outside companies for many of its applications, including the manufacture of foils and adhesion laminates.
``It's a good fit that doesn't necessarily add any brand-new products to our portfolio, but gives us capacity to grow in the health-care area,'' Lindley said.
The Chicago packager, a unit of Paris-based Pechiney Group, recorded $950 million in fiscal 2001 film and sheet sales, and ranked fifth on Plastics News' list of North American film and sheet manufacturers. With the acquisition, the company operates 38 packaging facilities worldwide.
The company continues to make acquisitions despite a soft economy. Its parent company reported a 25.8 percent drop in profit for 2001, but said prospects for 2002 are brighter.