Quadrant AG has agreed to buy shapes maker Poly Hi Solidur Inc., setting up a global giant in the production of engineered plastic parts.
The sale will join Poly Hi, a U.S. maker of semi-finished parts from ultrahigh-molecular-weight polyethylene, with Quadrant, a Swiss maker of stock parts from high-performance and high-temperature engineering plastics. The deal is to be completed by early August.
The acquisition fills some gaps in Zurich, Switzerland-based Quadrant's product portfolio and meshes two like-minded companies, said Kress Schwartz, spokesman for Quadrant Engineering Plastic Products, the company's U.S. subsidiary. Quadrant bases its U.S. operations in Reading, Pa., in the same state as two Poly Hi plants, Schwartz said.
Quadrant, a publicly held company on the Swiss Stock Exchange, will pay $82 million in cash to create the engineered-plastics powerhouse. The company also is assuming $3 million of capitalized leases from Poly Hi, financing those from existing funds and bank credit, Quadrant officials said.
Including the Poly Hi business, the Swiss company expects to record sales this year of almost 700 million Swiss francs ($556 million), Quadrant officials said in a news release. About 80 percent of that total comes from processing high-performance engineering plastics. The combined operations will employ 2,300.
The companies should be far ahead of any competitors for semi-finished parts from specialty materials, said Poly Hi Solidur Americas President Harold Epps. Poly Hi already is considered the largest worldwide maker of machinable UHMW PE parts, Epps said.
``We're putting together two leading companies, with No. 1 brands for engineered plastic parts,'' Epps said in a telephone interview June 27, the date the deal was announced. ``I think we did well in forming this marriage.''
Menasha Corp. of Neenah, Wis., has owned Fort Wayne, Ind.-based Poly Hi since 1973. The Wisconsin holding company decided earlier this year to look for a buyer and focus more attention on its growing returnable-packaging business, said Menasha spokesman Michael John. Menasha also owns Orbis Corp. of Oconomowoc, Wis., a leading North American maker of plastic materials-handling systems.
The Poly Hi business was a large plum and attracted much attention, John said. Richmond, Va.-based investment firm Harris Williams & Co. solicited bids for the company and found a good match in Quadrant, John said. The business never went to auction after Quadrant moved aggressively to buy Poly Hi, he said.
Poly Hi has built a strong global presence, establishing a European base in Vreden, Germany, not far from Quadrant's headquarters in Zurich, Epps said. The company also has plants in France, England, Japan and South Africa, according to John.
The company also has three U.S.-based operations, including a recently expanded facility in Fort Wayne and plants in Delmont and Scranton, Pa., Epps said. The UHMW PE parts maker recorded sales of $169 million last year and has more than 1,000 employees, almost half of them in North America, he said.
Poly Hi is a major provider of machinable industrial parts, including gears, bearings and liners for tanks and silos. The company also makes a range of engineered products from PE, UMHW PE and polypropylene, including food-processing equipment and front skis for snowmobiles. Its Meditech unit, which make shapes for prosthetic devices and orthopedic implants, was boosted in February by a $2.5 million investment. The company works with a range of specialty machinery, performing compression molding, fabrication and ram extrusion. Poly Hi claims to have the largest ram-extrusion operation in the world, at its Fort Wayne site.
Poly Hi and Quadrant both are strong in industrial channels, Epps said. Quadrant supplies engineered products for conveying and packing lines and was one of the first companies to provide stock machinable parts in North America, Schwartz added. The companies plan to sell some products through similar channels, Epps said.
Quadrant has 1,300 employees at 27 sites, including North American production in Reading, Wytheville, Va., and Guelph, Ontario, Schwartz said.
