Illinois Tool Works Inc. has bought recycler St. Jude Polymer Corp. to supply plastic to the strapping manufacturing operations of ITW's Signode division.
Terms were not disclosed, but an official with Glenview, Ill.-based ITW said the company plans additional investments in St. Jude, and plans to keep St. Jude's existing management team of President Steve Babinchak and Vice President Frank Petrachonis in place.
``The main focus of this is for the PET to support Signode's growing strapping business,'' said John Becker, vice president and general manager for Signode Plastics. ``We've worked together a long time with St. Jude ... and we decided to get together.''
ITW completed the acquisition Sept. 1. Signode is one of North America's largest strapping manufacturers.
St. Jude recycles both PET, which Signode uses in its strapping, and high density polyethylene, which can be used by other ITW divisions, Becker said. Signode makes steel strapping, stretch film and pressure-sensitive tape, and has a PET recycling operation in Florence, Ky.
Frackville, Pa.-based St. Jude recycled about 15 million pounds of PET and HDPE in its most recent fiscal year, with almost all of that from post-consumer sources. The company will continue doing non-ITW work, like toll processing, Babinchak said.
He said ITW will give the small recycler resources to expand its solid-stating and drying capacity, and he also cited personal reasons for selling.
Babinchak said that when his son, Stephen Babinchak, and nephew, Jack Babinchak, decided in the past year that they were not interested in taking over the company, he started to look for other options. ITW had been a longtime customer - a predecessor had been St. Jude's first customer - and the two firms started talking late last year about a buyout, Babinchak said.
He said ITW's wide scope of business, with $11.7 billion in sales and 650 business units, presents opportunities to expand St. Jude's HDPE recycling as well: ``It just made it exciting. We could expand to a lot of other areas we couldn't do on our own.''
St. Jude started in 1977 as one of the first companies to recycle PET bottles, and Babinchak said the company played a key role in expanding the recycled PET market into automotive applications in the early 1980s.
``I blinked and 27 years went by,'' he said. ``I still feel like I'm that 35-year-old that started the company, but I'm not.''