An investor group led by management and private equity firm Hamilton Robinson LLC now owns 100 percent of Pawcatuck, Conn.-based machinery supplier Davis-Standard LLC after chemicals and additives company Chemtura Corp. sold its 60 percent interest.
Chemtura said the deal is for about $72 million in cash, plus an additional $8 million that is contingent upon certain post-closing determinations.
Chemtura, formally known as Crompton Corp., had termed Davis-Standard a noncore business back in mid-2005. That's when it sold a stake of Davis-Standard and Black Clawson Converting Machinery to Hamilton Robinson.
Now fully independent from Chemtura, Davis-Standard LLC plans to expand its global converting and extrusion equipment business, said Davis-Standard President Charles Buckley. The company generated about $250 million in sales for the fiscal year ended Sept. 30. Buckley said sales should hit $275 million in the current year.
``Orders are up real strong,'' he said.
Management will own more than 20 percent of the company's common equity, Buckley said. That's up from just 2 or 3 percent equity when the joint venture was set up, he said.
``Not only will the existing management team remain in place, it will have plenty of skin in the game,'' Buckley said, referring to the higher equity stake by people running Davis-Standard. ``This is a very important ingredient for the future success of the company. A management team thinking and acting as owners is an empowered leadership team,'' he added.
Buckley said having Chemtura with a major ownership stake made it difficult to work on long-term investments - like whether to start a manufacturing operation in China.
Now, he said: ``Everybody that's an owner or a bank lender, we're all on the same page.''
Buckley said China is part of a long-range strategic plan that officials are working on now.
Hamilton Robinson bought Black Clawson, the Fulton, N.Y., maker of cast film and extrusion coating equipment, in 2003. Then the Stamford, Conn., equity firm approached Chemtura about bringing Black Clawson and Davis-Standard together.
The management team includes ``dozens of managers, and the company intends to offer the rewards of ownership to even more managers in the near future,'' the company said in a news release.
Davis-Standard LLC has facilities in Pawcatuck; Somerville, N.J.; and Fulton, N.Y.; as well as in Germany and the United Kingdom. Besides cast film and extrusion coating, the company makes extruders, blown film machines, feed screws, barrels, and process controls for the flexible web converting, plastics processing and rubber industries.