HT TrÃ¶plast AG, a German vinyl window profiles extruder, is being acquired for an undisclosed sum by a consortium formed by two U.S. investment firms, Advent International and Carlyle Group.
Troisdorf, Germany-based TrÃ¶plast's new owners plan to review the company and shake up manufacturing in a bid to improve its profitability.
Under the new regime, TrÃ¶plast can look forward to significant new investment, in particular in Russia. There, Boston-based Advent and Washington-based Carlyle see the need to expand the extruder's small profile unit in Voskresensk, Russia, to meet demand from a rapidly growing construction sector, according to Advent director Ron Sheldon.
In addition, the consortium will consider an expansion of sheet production in North America rather than shipping product from Europe in the face of adverse currency exchange conditions, Sheldon said in a recent telephone interview.
TrÃ¶plast, with annual net sales for 2004 of around 770 million euros ($958 million), employs 4,300. Its three divisions make PVC profiles and sheet; cross-linked polyolefin foam products and vulcanized fiber. It is ranked among the world's top-three vinyl building profile producers.
TrÃ¶plast's main business unit is Profine GmbH, a vinyl window and door profile, shutter and sheet manufacturer. It has profile production in Germany, Spain, France, China and Russia.
The private equity firms had been considered leading bidders to buy TrÃ¶plast since last fall. The seller is German industrial group Rutgers AG.
Sheldon said the Advent/Carlyle consortium expects to reveal its plan for TrÃ¶plast in three to six months.
``Clearly, we are going into [the company] looking at the profitability of the business,'' he said. ``We note that it is not performing as a well as some of its competitors. We do think manufacturing can be streamlined and be run in a better way.''
Sheldon admitted there has been speculation on whether the new owners will sell any of the units. He stressed that no decision has been taken to dispose of any part of the company.
Advent International is a private equity investor in the chemicals sector, including investment in Europe's fourth-ranked PVC producer, Vinnolit Kunststoff GmbH of Ismaning, Germany. Advent also invested in building materials group Bolix Sp.zo.o of Zywiec, Poland, that country's second-biggest manufacturer of exterior-finish polystyrene foam thermal insulation.
Vinnolit is a long-established supplier of PVC to TrÃ¶plast although the extruder also buys raw material from other sources. Advent's interest in Vinnolit gives TrÃ¶plast's new joint owner ``a very good insight into PVC pricing'' and will help the consortium to make business decisions at TrÃ¶plast, Sheldon said.
The TrÃ¶plast sale completes Essen, Germany-based Rutgers' disposal plan for all of its plastics businesses. Rutgers announced the plan last year.