Bayshore Vinyl Compounds Inc., an independent PVC compounder and recycler, has been sold to Mexican PVC and specialty chemicals maker Mexichem for $16 million.
The actual selling price for Tennent, N.J.-based Bayshore will be slightly higher, based on future profit and other considerations, said co-owner Barry Axelrod, who founded the firm in 1986.
Bayshore, which employs 50 and operates eight compounding lines in a 110,000-square-foot plant, will be run as part of Mexichem's Primex unit. The acquisition is the first outside Mexico for publicly held Mexichem, which is based in Mexico City.
Although Bayshore had purchased resin from Mexichem at various times over the years, Axelrod said he was not looking to sell when he was approached by a financial broker last year. But after thinking it over - and taking his own age and the future of his employees into account - he agreed to the deal.
``I'm 64 years old, and I got to thinking about what I wanted to do,'' said Axelrod, who has run the business from his Florida home since 2004. ``My first five employees are still with me, and I wanted to be loyal to them.''
Mexichem has no plans to change Bayshore's staffing or product mix, which consists of flexible and rigid PVC compounds. Recycling once was a good chunk of Bayshore's business but now makes up less than 5 percent of sales, as scrap rates throughout the PVC industry have been reduced. More than half of Bayshore's annual sales - which hit $25 million in 2005 - are into the construction market.
``I was interested in the deal because it wasn't the type of acquisition where someone comes in and splits everything up and then everyone's gone,'' said Axelrod, who will stay with the company as president for at least the next five years. Axelrod worked in the PVC sector with such companies as Monsanto Inc., Continental Can, Alpha Plastics and Roscom Inc. for 20 years before launching Bayshore.
Mexichem's level of integration - the firm makes chlorine and plasticizers as well as PVC, and is moving into vinyl chloride monomer production - will help make Bayshore more competitive, according to Axelrod.
``It's hard to compete anymore if you're not back-integrated [in PVC]'' he said. ``But we have a very loyal customer base, and making this deal will allow me to have some fun for a few years without the major headaches of being a business owner.''