Captive Plastics Inc. is gaining plants in the South with its acquisition of Grafco PET Packaging Technologies of Hanover, Md.
The deal with Captive Plastics Inc. of Piscataway, N.J., also gives Grafco customers more plant locations, more PET technology and the ability to tap into other materials and products including multilayer high density polyethylene bottles, closures and decorating.
``What we're trying to do is take our company to the next level,'' said Tim Frank, Grafco president and chief executive officer, in an Aug. 3 telephone interview. ``This will do that for us.''
Grafco has been run by the Frank family since 1978.
The deal, announced Aug. 3, gives Captive extra muscle in injection stretch blow molded PET.
``It gives us the scale needed to compete in today's ever-competitive environment,'' Tim Frank said. Grafco's end markets include food, health care, personal care and specialty beverage.
``It's a great augmentation to each other's customer mix,'' he said.
Terms of the transaction were not disclosed. The acquisition is expected to close during the third quarter.
Most immediately, the purchase gives Captive four molding sites and 400 additional employees, adding to the firm's blow molding plants in Tacoma, Wash.; Lathrop, and Redlands, Calif.; Peosta, Iowa; Phoenix; Edinburgh, Ind.; Louisville, Ky.; Piscataway, N.J.; Phillipsburg, N.J.; and two plants in Richmond, Va.
Captive also has injection molding capacity in Louisville, Peosta, Piscataway and Redlands. Grafco operates plants in Hanover; Dunkirk, N.Y.; Bettendorf, Iowa; and Morrow, Ga., near Atlanta.
``PET continues to grow in excess of the overall market both through conversions and appeal of base products that exist,'' said Peter Martin, president and chief operating officer of Captive. ``We see that continuing. We see growing through conversions and success of base products. Our growth rate has been disproportionate [in] the PET area.''
John Dezio, Captive's chief executive officer, said that growing into the South is important to Captive.
Both Martin and Dezio said that despite this being Captive's third acquisition during the past two years, it does not mean the firm is on an acquisition frenzy. The company acquired Premier Plastics Inc. in Tacoma, Wash., late in 2005. Just a few months earlier, Captive bought Spentech Plastic Containers Inc. of Richmond, Va.
``Frenzy connotes that you're buying anything and everything,'' Martin said. Under majority owner First Atlantic Capital Ltd. of New York, the company has the opportunity to look at acquisition candidates on a regular basis.
``We have bypassed or turned down opportunities,'' Martin said. ``We are very deliberate in the types of companies that we are targeting. We're absolutely very prudent, as is our financial partner.''
With the continued consolidation of the industry, Martin said Captive is intent on being an acquirer.
``I don't think what we're doing is radically different than others,'' he said.
Grafco's founders, the Frank family, bought a spice tin manufacturing business in 1978 and melded it with the Sheet Metal Coating and Litho Co. business. The company started to step away from printing and coating and in 1988 bought its first plastic bottle manufacturing plant in Georgia. By 1994, PET was Grafco's core business.
The company now is operated by Tim Frank, who serves as president and chief executive officer, and Tom Frank, who serves as vice president of sales and marketing. The two men will stay with Captive in management consulting roles.