Buyout fund specialist Baird Capital Partners has pulled together a management team, led by longtime industry veteran Harold Faig, to run MedPlast Inc. - the new name for two medical companies Baird has acquired.
MedPlast was formed from the engineered rubber and plastics group of Applied Tech Products Corp. and family-owned K&W Medical Specialties of Westfield, Pa., creating a $90 million medical manufacturer with nearly 800 employees and five U.S. plants. The new company will be based in Tempe, Ariz.
Terms of the acquisitions, announced April 15, were not disclosed. River Cities Capital Funds of Cincinnati was a co-investor.
The combined operations have more than 130 plastics and rubber molding presses, with clamping forces of 28-1,000 tons, and the ability to design and build more than 200 custom molds annually, Baird said. The merged firm will have four clean rooms.
``If you were going to design a company from scratch, this is it,'' Faig said April 17 in a telephone interview. ``These are the companies we wanted and the people we wanted. All the operating and engineering groups at both companies are staying. We are not moving plants or consolidating operations.''
Faig was president and chief executive officer of medical manufacturer Tech Group Inc. for two years after retiring as president and chief operating officer of Milacron Inc. in 2003.
``We looked at hundreds of companies,'' said Faig, who has 35 years of experience in the plastics machinery and medical contract manufacturing businesses. ``We were impressed with the technical competencies of these two companies and the tremendous desire of their people to please customers.''
Faig touted the combined experience of the two acquired companies in rubber, plastics and silicone - as well as overmolding, two-shot and thermoplastic molding, and design capabilities through HS Design Inc. of Gladstone, N.J., in which the acquired ATP unit owns a minority stake.
``This is a huge advantage for a company with a core business in thermoplastics,'' he said.
``Customers are looking at how to change or enhance the products they have, and at new devices to deliver medicine a different way,'' Faig said. ``All of our customers use, or would love to have, rubber and silicone as part of the manufacturing technique. The market has moved well beyond shoot and ship.''
Roughly 70 percent of MedPlast's sales will be in health care, with the rest in the specialty industrial market. Much of the latter is in aerospace and defense work at the Monticello, Iowa, plant that was part of K&W.
The other four sites are the K&W plant in Westfield and the former ATP plants in Elkhorn, Wis.; West Berlin, N.J.; and Tempe.
The acquired ATP plants make trocars, staplers, autosutures and other hand-held, single-use surgical products in applications where thermoplastic elastomers are molded over polycarbonate and medical-grade ABS. The plants also make medicinal applicators and hand-held diagnostic equipment for the women's health market.
K&W also is involved in medical and pharmaceutical devices, and hospital and surgical markets, as well as blood-collection devices and products used to deliver medicines into the body, and to test for early detection of diseases.
Virtually all of K&W's products are made in clean rooms, Faig said.
``The companies share some common attributes,'' said Andrew Brickman, a partner with Baird Capital of Milwaukee.
``They both have high-quality products, they both have highly skilled and dedicated employees and they both have a strong customer base that allows us to grow going forward,'' Brickman said.
``We are not looking for growth at breakneck speed, but we feel that we can grow fairly quickly with double-digit growth,'' particularly as both companies have many long-term customer relationships of 15 years or more.
``K&W had a good balance sheet and just didn't want to grow,'' said Brickman, noting that such growth can be ``capital-intensive.''
``You have to buy more equipment, add more clean room space. Now they are in a great position to grow.''
He also said the acquisition will allow K&W management to focus on the technical side of the business, which is its focus. Handling the administrative tasks had become a burden with the company's growth, from fewer than 10 employees in 1980 to more than 200 at the time of the acquisition, he added.
Faig said he has formed a small group of managers, many with 15-25 years of experience, to run the company. The rest of the new management team will be announced in the next two weeks.
``All of them have a really deep history in plastics, in mold making, design and engineering,'' Faig said.
``The opportunities are huge,'' he said. ``This is a health-care industry that is growing and getting bigger all the time. It is fragmented, but we have the mass, size and leverage that we need to compete. North American companies are looking for engineering solutions.''