Spartech Corp. expanded its product line March 31 by acquiring Polymer Extruded Products Inc. of Newark, N.J., for $24.2 million in cash.
PEP had sales of about $21 million last year. Its two chief products are cast cellulosic sheet and blown acrylic film called Korad, mainly sold as a weatherable laminating film. PEP can polish cellulosic sheet to optical quality demanded in safety face-wear and sports face masks. David Pocost, Spartech's executive vice president for custom sheet and roll stock, said sales are about evenly split between cellulosic products and Korad acrylic film.
PEP operates one production facility with 100,000 square feet of space and a warehouse in Newark. It runs six extrusion lines with barrels of 41/2 inches to 6 inches. One of its machines is an 83-millimeter twin-screw extruder. Pocost said Spartech will make undisclosed capital improvements at the 90-employee Newark operation.
Spartech plans to run the acquired business as Spartech-PEP. It will be a separate division in the firm's custom sheet and roll-stock group headed by Pocost. In addition to boosting Spartech's product line, the deal expands its customer base in construction, recreational vehicle and other outdoor-product markets.
The deal will provide some vertical integration with Spartech. PEP last year sold nearly $4 million worth of products such as Korad film and sheet to Spartech's custom sheet and roll-stock segment. Spartech will be able to provide specialty compounds to PEP.
PEP had been owned by a private investment firm and by its own managers. The investment firm wanted to cash in on its investment after holding the stake for five years, Pocost said in an interview from Spartech's head office in Clayton, Mo.
PEP will gain from being part of a large organization with a lot of technology, said Peter Byra, Spartech-PEP business manager. He was PEP's executive vice president of operations before the acquisition.