A Minneapolis private equity firm run by plastics industry executive Bill Spell has acquired injection molder Victor Plastics Inc. of Victor, Iowa.
For Spell Capital Partners LLC, the March 12 purchase extends its extensive polymer processing holdings, which include PW Eagle Inc., Copperfield LLC, Midwest Plastic Components and W.L. Plastics LLC.
``Our firm feels comfortable in the plastics industry,'' Spell, the equity firm's president, said by telephone. ``We think plastics is a growing sector. We think we understand it because we have been in it so long.''
Spell Capital is exploring ``new platforms'' and ``new add-ons'' to existing businesses, Spell said. The company bought Victor from the estate of the company's founder. The Chicago office of investment banking firm Brown Gibbons Lang & Co. LP represented the Kubu family in seeking a buyer for Victor Plastics. Terms were not disclosed.
``Ultimately, we received indications [of interest] from at least 10 parties,'' with about 70 percent involving financial organizations, said Stephen Miles, managing director of Brown Gibbons Lang.
Victor Plastics employs more than 700 and had 2003 sales of $88.6 million. The firm operates 106 presses in Iowa plants occupying 435,000 square feet in Victor, Kalona and North Liberty. The company primarily, molds engineered thermoplastics for appliances, off-road vehicles, consumer products and industrial equipment.
In 2002, Victor established a logistics, tooling and molding office in Shenzhen, China. More recently, particularly for customer Maytag Corp., the processor arranged for output in Reynosa, Mexico. Victor uses contract manufacturers in China and Mexico, though production volumes are small.
Through the China and Mexico links, Victor ``can stay competitive if the industry and customer base require us to do that,'' Spell said. At the same time, ``we are committed to the U.S.''
James Kubu, who founded Victor Plastics in 1983, died in November 2002. His widow, Linda Kubu, is president, and his son-in-law Wade Teslow is executive vice president. Stephen Sawyer, longtime vice president of finance, oversees much of Victor's business activities.
Spell Capital said it is retaining the current management team, including members as equity owners. ``We give everyone an economic incentive,'' Spell said.
Spell Capital's holdings had 2003 sales of nearly $700 million.
A predecessor of Spell Capital completed several acquisitions beginning in 1993 in creating PVC pipe extruder PW Eagle, which also does business as PWPipe. Minneapolis-based PW Eagle had 2003 sales of about $350 million.
Beginning in early 1999, Spell Capital invested in businesses fabricating and extruding stranded copper wire and polymer-insulated electrical wire. Copperfield LLC of Bremen, Ind., had 2003 sales of $100 million. Coatings include PVC and cross-linked polyethylene.
Spell Capital purchased control of the St. Louis Park, Minn., injection molding plant of McKechnie Plastic Components in November 2001. The renamed business, Midwest Plastic, had 2003 sales of $22 million.
Victor and Midwest supply different end-markets, and Spell said the injection molders will remain separate.
In 2001, Spell Capital teamed with principals to form W.L. Plastics LLC in Casper, Wyo., a polyethylene pipe extruder that had 2003 sales of $30 million. In December, W.L. broke ground in Cedar City, Utah, for the firm's second extrusion plant.
Other Spell Capital businesses manufacture industrial pressure washers and make dump-truck bodies and hoists.