Amscan Holdings Inc. is closing a balloon-making plant it recently purchased from American Greetings Corp., laying off 111 and transferring production to sister company Anagram International Inc. in Eden Prairie, Minn.
When Amscan paid $27.5 million on Feb. 19 for M&D Industries Inc., ``we thought we could bring the efficiencies up'' in the balloon-making business, Paul Ansolabehere, Anagram vice president of operations, said by telephone.
The converting plant in Manteno, Ill., made metallic polymer balloons. M&D workers manually lifted, stacked and packed balloons, while competitors are automated. ``A lack of basic technology was killing'' M&D, he said.
M&D had annual sales of about $25 million. American Greetings of Cleveland owned the business for almost 19 months and agreed to continue distributing the balloon lines.
The acquisition reinforces Anagram's position at the top of the industry.
``Anagram is the largest metalized balloon manufacturer in the world, and M&D was second,'' Ansolabehere said.
Together the operations dominate the market for nonlatex party balloons, with global sales approaching $100 million. The firms use nylon, polyester and ethylene vinyl alcohol.
In completing the M&D deal, Amscan borrowed $12.5 million under a revolving credit line and issued stock worth $15 million to American Greetings, according to a Securities and Exchange Commission filing. On June 13, Amscan filed a registration statement with the SEC for a possible public offering of common stock to repay debt.
The Manteno balloon plant had employed about 150, he said. About three dozen employees were relocated within the company - some moving about two blocks from the 45,000-square-foot balloon facility to M&D's flexographic printing plant in Manteno, and others to positions in Eden Prairie or Elmsford, N.Y.
At the 30,000-square-foot printing plant, ``we've added to the volume, increased capacity by 300 percent and now employ 75,'' Ansolabehere said.
Elmsford, N.Y.-based Amscan designs, makes and distributes party goods. Amscan reported 2001 profit of $11.3 million on sales of $345.2 million, principally through party superstores and specialty retail channels globally.
In addition to metallic polymer balloons, Anagram makes flexible packaging for snack foods and medical products such as single-serve, time-release packs and adhesive strips. Metallic polymer balloons through Anagram accounted for 21 percent of Amscan's sales, the SEC filing said, representing $72.5 million.