Jarden Corp. has purchased injection molder O.W.D. Inc. in a quest to join together the two largest domestic producers of plastic cutlery for retail stores.
Jarden, a large producer of consumable home products, already owns the Forster cutlery brand, part of Jarden's November 2002 purchase of Diamond Brands Operating Corp.
With the new acquisition, Jarden claims to be the largest U.S. retail-store seller of plastic utensils and other dinnerware items.
Diamond had been struggling before the purchase, and Jarden bought the assets of the bankrupt company at auction. Diamond slowly is regaining its customer prominence, and the O.W.D. acquisition will up the ante, according to Martin Franklin, Jarden chairman and chief executive officer.
``We think it's a good fit to try to build on our business and strengthen our competitive position,'' Franklin in an April 28 investor teleconference from Jarden headquarters in Rye, N.Y. ``Because of [O.W.D's] relationship competing against Diamond, we initiated discussions with them.''
O.W.D., based in Tupper Lake, N.Y., sells the Lady Dianne brand of plastic cutlery, straws and plates. The company, also known as Tupper Lake Plastics, employs about 125 and recorded sales of $15 million in 2002, Franklin said.
Both O.W.D. and Jarden focus on 24- and 48-count cutlery packages for mass merchandisers, not the food-service segment.
Diamond Brands and its Forster line sold about $50 million worth of cutlery last year, Franklin said. Most of their retail plastic cutlery competitors are overseas, he said. Most of Diamond Brand's cutlery products are molded in East Wilton, Maine.
Jarden hopes to improve profit margins by combining the two companies, Franklin said.
``There's a great deal of margin giveaway for one supplier in the domestic market competing against another domestic supplier,'' he said. ``Coming at the market with both companies will mitigate some of that.''
Jarden plans to retain both the Lady Dianne brand name and the Tupper Lake facility, Franklin said. Terms of the April 28 deal were not disclosed.
Jarden expects Diamond to remain down in sales through 2003 before picking up the pace next year, Franklin said. The company paid about $90 million to buy Diamond's assets.
The plastics consumables segment accounts for about 15-20 percent of Jarden's overall business, which includes such products as home canning, kitchen matches and toothpicks. The company had been known as Alltrista Corp. before selling off the bulk of its thermoforming assets and changing management in 2001.
Jarden recorded sales of $368.2 million last year. Franklin said the company is looking for more acquisitions in the plastics consumable end and elsewhere to add to its portfolio this year.