Snatching up yet another competitor, Myers Industries Inc. has added privately owned Canadian-based ITML Horticultural Products Inc. to its industry-leading and still growing $170 million lawn and garden container business.
It is the second acquisition in three years and the fourth in seven years in that segment by Myers. ITML will operate as an independent unit in Myers' lawn and garden business.
``With this purchase, we are, by far, the biggest company in that market in North America,'' said Max Barton, director of investor relations and corporate communications for the $900 million Akron, Ohio-based manufacturer, in a telephone interview. ``They were one of our most significant and strongest competitors.
``It gives us a lot more penetration throughout Canada and in the southwest United States, as well as key customers and distributors in Florida'' where competitor Nursery Supplies Inc. of Chambersburg, Pa., has a strong footprint.
Terms were not disclosed, but the purchase price is estimated at less than 5 percent of Myers' annual sales. The acquisition was announced Dec. 28, and is scheduled to close in early January.
``The transaction is clearly positive in terms of gaining share of market and in expanding their customer base,'' said analyst David Leibowitz of Burnham Securities Inc. in New York. ``They have a significant share of market in the lawn and garden container business and this acquisition will further strength that position. It enhances their position as a market leader, gives them incremental volume, gives them more labels they can market and gives them additional manufacturing capacity.''
ITML has three manufacturing plants in the Ontario cities of Brantford, Brampton and Burlington, and two in the United States in Waco, Texas, and Lugoff, S.C.
Myers, once its plant in South Gate, Calif., is shuttered in early 2007, will have six plants that make lawn and garden products - one in Vancouver, British Columbia, one in Sparks, Nev., and four in Middlefield, Ohio. The plants make nursery containers, trays, flats, hanging baskets, nursery pots and decorative resin planters.
Barton said no decision had been made on whether any of the manufacturing plants will close. ``That will be determined over the next few months.''
Myers recently moved manufacturing at the South Gate plant of Productivity California, the lawn and garden company it acquired two years ago, to Sparks in order to serve the West Coast at a lower cost, Barton said.
As part of the ITML acquisition, Myers also acquires a recycling plant in Brantford that recycles high and low density polyethylene, polypropylene and polystyrene.
``Hopefully, we will be able to increase the use of recycled materials in greater amounts in our products. That would lower the cost of manufacturing and reduce the amount of prime resin we need to buy,'' Barton said.
Myers manufactures polymer products for the industrial, agricultural, automotive, commercial and consumer markets, including reusable materials-handling containers and pallets, and engineered rubber and plastic components for the transportation industry.
The company also is the largest wholesale distributor of tools, equipment and supplies for the tire, wheel and undervehicle service industry in the United States. It has more than 5,000 employees at 30 manufacturing facilities in North America and Europe.
Its portfolio of lawn and garden brands include Dillen Products, Pro Cal, Listo Products and three brands from ITML-Kord, Euro Systems and TLC.
In the nine months ended Sept. 30, the company's lawn and garden segment had sales of $119.7 million, down 4 percent compared with the same period a year ago. Profit was $6.9 million, down 37 percent from $10.9 million from the same nine-month period in 2005, with much of the decline attributable to costs incurred in realigning production to lower-cost facilities.