Spartech Corp. has added to its compounding portfolio by acquiring GWB Plastics Holding Co. for $48.5 million.
GWB owns and operates UVTec Inc., a Dallas compounder and concentrate maker, and Atlanta-based PolyTech South. UVTec and PolyTech South posted combined sales of more than $40 million last year.
UVTec employs 72 at its Dallas office and Arlington, Texas, plant. PolyTech South has 10 employees, but makes its product via toll compounding and does not own its own production site.
GWB Plastics Holding is part of GWB (USA) Inc., the North American arm of British investment group Gartland Whalley and Barker plc.
The deal will give Clayton, Mo.-based Spartech access to new lines of flame-retardant and ultraviolet-light-stable polyolefin compounds, as well as another manufacturing presence in the Southeast and 70 million pounds of additional capacity, according to Bradley Buechler, Spartech chairman, president and chief executive officer.
Acquiring the two firms ``broadens [Spartech's] opportunities with engineered specialty products,'' Randy Martin, Spartech executive vice president and chief financial officer, said in a May 9 telephone interview.
``We can integrate companies of this size pretty well,'' Martin said. ``They had done a lot of work in the wire and cable market, and we're looking to put their products into automotive and appliance uses as well.''
>From a production standpoint, PolyTech South will continue to work with toll compounders, while UVTec will continue to operate out of its 66,000-square-foot, leased space in Arlington, Martin said. Spartech has no immediate plans to introduce existing Spartech products in Arlington, or to begin making UVTec or PolyTech South materials at existing Spartech plants, according to George Abd, executive vice president of Spartech's color and specialty compounds business.
Existing PolyTech South/UVTec plant and management personnel will remain in place, while some administrative personnel will be eliminated as that work is centralized, Abd added.
The economic downturn of 2001 and the slow pace of the 2002 comeback are making more companies like the GWB properties available, Martin said.
``There are more acquisition opportunities out there now than there were a year ago,'' he said. ``We just have to make sure those opportunities fit into the markets we're targeting.''
The move comes less than three years after GWB officials announced plans to build ``a core group of boutique-style, high-end products'' in the plastics industry. The firm intended to make two or three acquisitions a year, ultimately leading to an initial public offering.
But the GWB plan never went beyond the acquisitions of PolyTech South in early 2000 and UVTec in early 2001. GWB (USA) maintains a small plastics presence through Sun Microstamping Inc., a GWB-owned metal-stamping firm in Clearwater, Fla., that also does plastic insert molding. The parent GWB firm also owns a pair of profile extrusion companies in England.
GWB (USA) officials could not be reached for comment.
First-quarter sales in Spartech's color and specialty compounds business totaled $48.9 million, down 16 percent compared with the same period in 2001. The unit, which accounted for about 26 percent of Spartech's total first-quarter sales, also saw its first-quarter profit drop 19 percent to $5 million in the same comparison.
The newly acquired businesses will become part of the Spartech Polycom compounding unit, officials said. The GWB acquisition was financed by a recent stock offering in which Spartech raised about $45 million by offering 2.1 million additional shares.