SST Industries Inc., a major U.S. producer of industrial plastic pails and drums, has been bought by one of North America's largest makers of industrial steel containers.
In a marriage of convenience, steel-container maker BWay Corp. of Atlanta bought SST on Aug. 25 to move into the plastic container market, Jeff O'Connell, BWay vice president and treasurer, said Aug. 26. The deal makes sense for BWay, he said.
``The current customer base we have today and our current distributor network are very complementary to SST,'' O'Connell said. ``The metal side of the business, where we've been historically focused, is fairly mature, without much room for growth. This is a first step to go beyond metal packaging.''
The deal could provide a leap forward for SST, too. The company, based in Loveland, Ohio, operates three U.S. plants and recorded sales of about $30 million last year, O'Connell said. Those numbers are nowhere near the level of BWay: The Atlanta company has 10 U.S. plants and recorded about $525 million in 2002 sales.
New York-based equity firm Kelso & Co. bought BWay for $174 million in February and took the company private. Kelso's prominent portfolio includes plumbing supplies giant American Standard Cos. Inc., Wrangler jeans supplier VF Corp. and International House of Pancakes Corp.
The energized BWay set its sites on growing its pail-and-drum business, after amending its $90 million credit agreement after the Kelso purchase. SST was available after parent company SST Corp., a maker of chemicals and industrial parts in Clifton, N.J., decided to sell its container business.
SST Industries makes injection molded pails and blow molded, tight-head containers and drums used primarily for food and chemical products. The tight-head containers include a pour spout or cap for opening.
The Ohio company claims to be the largest U.S. maker of high density polyethylene industrial containers in 21/2-8 gallons and a top-three producer of those containers in 15, 30 and 55 gallons.
The company, founded in 1987, has a 285,000-square-foot plant in Loveland, near Cincinnati, and smaller facilities in Peachtree City, Ga., and Fredericksburg, Va. SST has about 185 employees, O'Connell said.
SST officials referred all calls to BWay.
BWay might be looking to buy more plastic container producers as it continues to grow in the industrial packaging market, O'Connell said. The SST acquisition represents a new direction for the company.
``The [plastic container] market is a little more fragmented than some others,'' he said. ``There will be opportunities to buy some companies.''