Techmer PM has purchased Accel Corp. in a deal that will help to consolidate the North American market for color concentrates.
No purchase price was disclosed in the deal, which was announced March 28.
In a news release, officials with Clinton, Tenn.-based Techmer said they'd make use of Accel plants in Avon, Ohio, and Naperville, Ill. Accel sites in Ontario, Calif., and Knoxville, Tenn., will be closed, said John Manuck, Techmer president and chief executive officer, in a March 31 telephone interview. The Knoxville site has been idle since mid-2007.
Accel will help Techmer grow its small-lot color business, Manuck said.
``Transaction velocity and small-order capability are increasingly important to North American molders who have been battered by global competition,'' he said.
North Ridgeville, Ohio-based Accel was founded in 1998 by Dwight Morgan, who had previous industry experience with M.A. Hanna Co. The firm employs about 75 and has annual sales of about $20 million. Accel's sales base covers 600 customers throughout North America.
``Accel did not have the critical mass to establish a national footprint on its own,'' Morgan said. ``Joining an industry leader like Techmer allows us to give our customers national as well as global support with a much broader product offering.''
Techmer employs 500 at plants in Clinton; Wichita, Kan.; Dalton, Ga.; and Rancho Dominguez, Calif. After the acquisition, the firm will have sales of about $200 million.
``I've known Dwight for a long time and knew he had a solid strategy,'' Manuck said. ``Doing fast color matches and quick turnaround is more of a challenge than most people realize. You really have to organize your team to do it well.''
Manuck described Accel as specializing in orders of less than 5,000 pounds, but said the business can handle even smaller orders of less than 1,000 pounds. Techmer also may produce Accel-style small-lot orders at its plants in Clinton and Rancho Dominguez, Manuck added. Some of Accel's extrusion lines will be transferred to Techmer facilities.
Morgan will continue with Techmer, running the small-lot business from the Avon and Naperville sites. He said high resin costs and a shrinking customer base had made life difficult for Accel in recent years.
``We opened the site in Tennessee and bought the plant in California in 2003, but we couldn't get any traction,'' Morgan said April 1. ``Naperville and Avon were profitable, but the base of North American molders was shrinking from 12,000 to less than 10,000. As we saw that consolidation, we realized we had to be a national player,'' he said.
A strength of Accel's business has been what Morgan called ``higher-end packaging'' in closures such as bottle caps and spray-paint caps. The firm's products are based on a range of resins from polyolefins to engineering materials.
Accel's majority owner - Crescent Private Capital LP of Boston - also wanted to exit the business, Morgan added. Morgan had sold one-third of Accel to Crescent in 2001. Crescent then exercised an option to acquire a majority stake in the firm earlier this year. Several other business partners have small stakes in Accel.
Chicago-based investment bank Blaige & Co. represented Accel and Crescent in the transaction. Accel contacted Blaige in early 2007 and worked with several potential buyers - including private equity firms and other concentrate makers - before striking the deal with Techmer.
Techmer also is in the process of completing a $5 million project in which the firm rebuilt and reconfigured its plant in Dalton.
The new, 30,000-square-foot plant - which will open by the end of the month - is dedicated to the fibers market and will allow Techmer to close a smaller plant in Gainesville, Ga., about 150 miles away. About half of Gainesville's 35 employees will transfer to the Dalton site, Manuck said. The expansion includes new lab facilities to help customers with product development.
The Accel deal and the Dalton expansion demonstrate Techmer's commitment to the North American market, according to Manuck.
``With all the issues going on - the economy, Asia - there's still going to be business in North America,'' he explained. ``We want to be a leader in North America, and we're making a fundamental statement that we believe in the business.
``With Accel, we added a market segment we didn't have and also got some plant locations we needed and good personnel,'' Manuck said.