Blackfriars Corp., a low-profile private investment firm based in Northbrook, Ill., is about to become a much bigger player in the consolidating market for semi-finished plastics distribution.
The firm on Aug. 23 agreed to pay $65 million for Laird Plastics Inc. of West Palm Beach, Fla., the third-biggest player in its sector.
Blackfriars already owns Los Angeles-based Port Plastics Inc. and Amari Plastics plc of Weybridge, England. The combined operations rank behind global leaders ThyssenKrupp Services AG and GE Polymershapes.
``This deal puts the new Laird Plastics, with the synergy of the acquiring companies' other holdings ... at No. 3 globally and No. 2 in the U.S.,'' said Mel Ettenson, editor of ``Global Plastics Letter,'' a Franklin, Mich.-based newsletter focusing on the shapes/sheet distribution sector.
Laird Plastics reported 2003 sales of about $210 million, according to London-based parent company Laird Group plc.
The combined operations of Port Plastics and Laird Plastics give Blackfriars a 10 percent share of the U.S. shapes market, according to Ettenson. Laird Plastics on its own claimed a 9 percent market share. The company employs 500 at 47 distribution branches, serving up to 25,000 customers across North America.
Port Plastics, in business for 40 years, has 11 branches across the western United States. It carries a wide range of engineering, high- performance and commodity plastic products aimed at a diverse range of customers.
Across the Atlantic, 25-year-old Amari Plastics runs 17 branches around the United Kingdom, supplying 11,000 customers in the sign-making, building and engineering sectors. Its range of around 16,000 plastic sheet, tube, rod and bar products include materials such as polycarbonate, acrylic, foam PVC and nylon.
Laird Plastics' President and Chief Executive Officer Mark Kramer welcomed the change in ownership.
``We are delighted to be joining an organization like Blackfriars, with its commitment to distribution,'' he said in an Aug. 25 telephone interview. ``Under the new ownership we are being encouraged to grow and achieve.''
In a statement to Laird Plastics' workforce, Kramer said: ``We have been favorably impressed with the sincerity of [Blackfriars'] interest in Laird Plastics, the consistency of the decentralized business model practiced throughout their holdings and with the potential for growth and success that they offer our company.''
Privately owned Blackfriars maintains a low profile, and has remained tight-lipped over the deal.
Kramer said Laird Plastics will continue to grow geographically and through product expansion, extending its service center network across the central United States and Mountain States, where it remains underrepresented.
Its service centers continue to be ``the heart of our business'' and the company means to remain marketing based and not in purely geographical selling, he said. Laird will target North America's most stable and strongest industries for its future business, he added.
Contrary to predictions in the United States that the distribution sector will soon be dominated by ``mega corporations,'' Kramer insisted the business is still very much in the hands of smaller family-held companies. There is no sign of the ``demise of the entrepreneurial distribution companies,'' he said.
Kramer estimated the new company's total plastics distribution annual sales will fall between $300 million and $400 million.
Still, shapes distribution has been consolidating in recent years, with the biggest deals being GE Plastics' 2001 purchases of Commercial Plastics & Supply Corp. and Cadillac Plastics. The units eventually became GE Polymershapes.
Ettenson sees the $65 million sales figure as a signpost to the future of plastics distribution.
``The purchase price was approximately eight and a half times earnings, which serves as a benchmark for subsequent consolidation in this sector of the plastics industry,'' he said.