Menasha Corp. has sold its Thermotech division to a private equity group that Menasha says can feed its growth needs.
Audax Management Co. LLC bought the Hopkins, Minn.-based injection molder Dec. 31. Other holdings of Boston-based Audax Group range from a cryogenic equipment company to a stake in the Boston Herald newspaper.
While those holdings are far afield from Thermotech's contract molding work, Audax's approach fits squarely with the processor's pent-up demand for more capacity, Thermotech President and Chief Executive Officer John Bonham said Jan. 18.
``They understand the real nature of the world we operate in and what pressures and expectations we have going forward,'' Bonham said. ``They're prepared to back us financially. That's really the expectation we have, giving us the comfort level to grow the business organically and through acquisition.''
Thermotech no longer fit with the rest of Menasha, a holding company that owns plastics pallet maker Orbis Corp. and ultrahigh-molecular-weight polyethylene shape maker Poly Hi Solidur Inc. Neenah, Wis.-based Menasha decided during 2003 to put its limited finances into its packaging businesses, spokesman Michael John said Jan. 19. About 75 percent of Menasha's portfolio comes from packaging, he said.
Menasha had owned Thermotech since 1988. Thermotech was one of five businesses that Menasha sold in 2003, John said. In the plastics market, another significant sale occurred in December 2002, when Libbey Inc. bought Menasha's Treax molding operation.
``We determined while executing our business plan that we didn't have the financial resources to be able to build [Thermotech] into a key player or strengthen its niche,'' John said.
Thermotech is eager to grow, Bonham said. The precision parts molder opened a plant in Queretaro, Mexico, in 2001 and expanded the number of injection presses in its El Paso, Texas, plant later that year. But the company still was not expanding geographically as quickly as it preferred, Bonham said.
Its technology also had been growing, as the company sidled into such areas as two-shot and insert molding and micromolding. Thermotech splits its molding work among the automotive, electronics and medical markets.
Bonham said Thermotech finished 2003 with sales of about $74 million, up $1 million from 2002. Now, Thermotech would like to penetrate the global market, especially when it can ship products from North American sites.
Audax takes a growth-oriented approach to business and is not looking merely for a quick, bottom-line return, Bonham said.
An Audax official who helped manage the purchase could not be reached for comment. Terms of the deal were not disclosed.
According to company literature, Audax has more than $1 billion under its management. The company's private equity group typically invests between $5 million and $75 million of equity to finance buyouts and other expansion plans for its portfolio companies.