Elkhart, Ind.-based Nibco Inc. has agreed to purchase Knoxville, Tenn.-based Consolidated Plumbing Industries, a maker of cross-linked polyethylene pipe.
The deal was slated to close May 15. Terms were not disclosed, but CPI will retain its name.
CPI's extrusion facility in Lebanon, Ohio, will be Nibco's fifth plastics manufacturing plant, giving the company a total of 13 plants. The other plants make metal fittings and products for the plumbing market.
The deal represents Nibco's first foray into pipe extrusion in North America, though the company does make PVC and chlorinated PVC pipe in a plant in Poland. Nibco makes PVC and ABS pipe fittings at some of its North American plants.
Rex Martin, Nibco's chairman, president and chief executive officer, called the CPI acquisition ``a growth opportunity'' in a May 10 telephone interview.
``The organic growth in cross-linked polyethylene is 15-20 percent per year,'' he said. ``We would hope to grow that fast or faster.''
There are three primary ways that manufacturers cross-link PE to make PEX. Two involve a chemical agent, and the other uses an electron beam. CPI employs the e-beam, a process both Martin and CPI President Paul Minbiole consider superior.
CPI's PEX plant has four high-speed extrusion lines. Martin said the company plans to add capacity right away.
``Our goal is to be selling hundreds of millions of feet per year in the near future,'' Minbiole said.
PEX has been gaining momentum due to increased use in radiant floor heating systems and as a replacement material for copper in various plumbing applications. High copper prices are helping to propel PEX sales as well.
According to the Loveland, Colo.-based Radiant Panel Association, an estimated 331 million lineal feet of PEX tubing was sold in North America in 2004, up 90 million lineal feet from 2003.
Minbiole said PEX's popularity in plumbing has caught up, and perhaps surpassed, PEX use in radiant floor heating systems.
Major building codes related to pipe now have PEX included in their language, which has stimulated market demand.
PEX pipe is flexible, which allows plumbers and installers to manipulate the pipe more easily than pipe made with rigid materials and to use fewer fittings.
``We see fast growth, and the price of copper is certainly accelerating that,'' Martin said. ``We're determined to be in any material that's going to be used in large quantities for residential construction in the plumbing arena.''