Injection molder U.S. Farathane Corp. is expanding in extrusion with the purchase of Ligon Bros. Manufacturing Co.'s plastic extrusion business in Almont, Mich.
The buyout will bring extrusion sales up to $20 million within the next 12 months for Sterling Heights, Mich.-based U.S. Farathane, and comes less than a year after USF entered the extrusion business.
``We are very, very excited about what this means to U.S. Farathane,'' President Andrew Greenlee said in a Sept. 13 telephone interview. ``The innovation in Almont is first-rate. When I first visited [Ligon], it reminded me a lot of what Farathane used to be. They've got people talent and product talent, but just needed to be aligned.''
The privately owned companies did not disclose the purchase price.
As a $6 million extruder, Ligon lacked market size and access to major customers. USF expects to see $120 million in sales by 2007 - up from $74 million in 2004.
USF also has the attention of automakers and their top suppliers. The company has embraced a variety of processing technologies such as two-shot and microcellular molding to give it a competitive edge in the auto industry. It makes a variety of functional and under-the-hood components.
Last year it expanded into extrusion when it bought the assets of Hahn Elastomer Corp.'s Plymouth, Mich., facility. Both sites have profile and sheet extrusion. USF also has been developing capabilities to thermoform sheet in Plymouth and has coextrusion and tri-extrusion production.
``We don't want to be just a standard extruder,'' Greenlee said. Ligon brings proprietary technology to USF, including the ability to produce integrated fasteners on its extruded parts. It was one of the first plastics companies to win business on auto body sealing programs that previously used rubber products.
The company also can help expand USF's customer base because 40 percent of its sales are to nonautomotive customers - makers of video game systems.
USF said it will retain the 30 Ligon employees and may add to the staff. USF also plans to invest in a new facility to house the Plymouth and Almont operations under one roof eventually, since both operations are near capacity, Greenlee said.
Even more growth may be on the way for USF, he said. The company is considering further expansions to house its core operations as well as seeking acquisitions that can add new products and diversity.