Tekni-Plex Inc. is a bigger force in polystyrene foam packaging with the July 23 purchase of thermoformer Elm Packaging LP.
Memphis-based Elm will complement Tekni-Plex's own PS foam businesses, including Dolco and Tekni-Plex Trays. Elm's 2001 thermoforming sales were $52 million in 2001, the company reported in Plastics News' most recent thermformers' survey. Tekni-Plex reported thermoforming sales of $136 million for the year ended June 30, 2001.
Elm runs production plants in Memphis; Troy, Ohio, and Fullerton, Calif., making PS foam plates, trays and hinged containers. Its former owner, private equity firm Code Hennessy & Simmons LLC of Chicago, predicted at its Web site that Elm would record sales of about $44 million for 2002. It sold Elm to privately held Tekni-Plex for undisclosed terms.
Tekni-Plex's thermformed product lines are based on PS and polyethylene. They include foamed egg trays made by its Dolco subsidiary. Tekni-Plex's five thermoforming plants are in Decatur, Ill.; Lawrenceville, Ga.; Dallas; Wenatchee, Wash.; and Somerville, N.J.
Tekni-Plex, which is based in Somerville, has diverse plastics and packaging operations, including film, hose, compounds, closures, recycled PET and rubber products. The firm's total sales were $548 million for the year ended June 30, 2001.
Code Hennessy's other main plastics businesses are Waddington North America Inc., a Covington, Ky., producer of disposable tableware with anticipated sales of $197 million in 2002 and Precise Technology Inc., an injection molder based in North Versailles, Pa., with projected sales of $161 million this year. Precise has 11 plants in the eastern United States, three mold-making facilities and a molding plant in the Netherlands. Code Hennessy also owns Kranson Industries Inc., a distributor of plastic and glass containers, pails and closures.
Private investment banking firm Goldsmith Agio Helms of Minneapolis helped arrange the Elm sale. Goldsmith managing director Barry Freeman said Code Hennessy sold Elm to realize a return on its investment.
Freeman said the Elm deal reflects consolidation occurring in the thermoforming industry and among thermoforming customers. In general it is a difficult selling environment for business owners, especially for those wanting to sell industrial product companies, because of the current recession, Freeman explained in a telephone interview.
``Sellers tend to hold on until their business becomes stronger,'' according to Freeman.
For about two years Elm was a force in PS recycling through the 1999 acquisition of National Polystyrene Recycling Co., formerly the PS industry's showcase recycling effort. But Elm shut the leased recycling plants in Chicago and Corona, Calif., in mid-2001, shortly after Code Hennessy purchased Elm from Don McCann.
The Elm sale was Goldsmith's 47th transaction in the plastics industry. Freeman said his firm also is involved in the pending sale of custom injection molder Courtesy Corp. of Buffalo Grove, Ill., and other, undisclosed plastics firms.