Xaloy Inc., a global supplier of plasticizing systems including screws and barrels, melt pumps, screen changers, pelletizers and chill rolls, has acquired competitor Spirex Corp. a major consolidation in a screw and barrel industry facing overcapacity.
The transaction was announced Sept. 28 between the two cross-state rivals. Xaloy is based in New Castle in western Pennsylvania, about a half-hour drive from Spirex headquarters in Youngstown, Ohio.
Terms were not disclosed.
Xaloy will center production of small screws in Youngstown and larger screws in New Castle, said Tom Bametzrieder, Xaloy's vice president of global marketing.
Xaloy was considered the largest player in its sector even before purchasing Spirex. In 2003, Xaloy bought New Castle Industries Inc. In 2006, it purchased Dynisco LLC's extrusion business, which included gear pumps, screen changers, cleaning ovens and water-ring pelletizers.
Company officials are being tightlipped about numbers total employment and sales. But in a Plastics News story a year ago when Xaloy was sold, a former executive said that Xaloy's sales were $112 million, and the company employed 620. Together with Spirex's employment of 110 and more than $20 million in sales, that would bring the combined sales to about $130 million and about 730 employees.
Bametzrieder declined to give sales and employment numbers for the overall company.
Xaloy already is moving to combine some production. Two days after announcing the sale, Xaloy issued a news release to say it is closing an Xaloy injection screw-making plant in Seabrook, N.H., and Spirex's bimetallic barrel plant in Sullivan, Wis. Together, the two factories employ about 75.
Xaloy will move production from New Hampshire to the Spirex screw factory in Youngstown and from Sullivan to the Xaloy barrel manufacturing facility in Pulaski, Va. Those conversions should happen during the next 100 days, the company said.
Last year, Xaloy itself got a new owner. Industrial Growth Partners of San Francisco bought Xaloy from another private equity owner, Baird Capital Partners. IGP brought in a new top executive, Ron Auletta, as president and CEO.
Auletta said Xaloy and Spirex have a long record of expertise.
Together, [Xaloy and Spirex have] over 110 years of innovative and engineered solutions in the global plastics industry, Auletta said in a news release. It is our intent to provide best-in-class support, products, services, and solutions to our customers by leveraging the combined company's technical expertise, broad product offering, and unique customer-focus culture.
Spirex President Paul T. Colby will stay with the company. Colby said he will help with the integration of the two companies, work with customers and develop new technology.
His father, Paul N. Colby, now retired, founded Spirex in 1978 ironically after leaving Feed Screws Inc., which later became New Castle Industries, and now Xaloy. Paul N. Colby was inducted into the Plastics Hall of Fame at NPE2009.
Adding Spirex another major player in screws and barrels makes sense for several reasons, said Bametzrieder and Paul T. Colby.
The most important reason was the opportunity to add Spirex's strong position in screws and barrels for injection presses to Xaloy's product lineup, Bametzrieder said. We're taking [and combining] the best of the best, he said in a telephone interview.
We're going to make a much better company, Colby said by phone. We'll have a lot more resources to develop new products, to improve our quality and put our focus on our customers.
Bametzrieder and Colby acknowledged that the market slump was part of the attraction. In 2008, total U.S. screw and barrel shipments fell 12 percent, according to the Society of the Plastics Industry Inc. in Washington. Screw and barrel sales are down for new machinery, since equipment sales have been weak for several years, led by injection molding presses which fell 15 percent in 2008, to a dismal 2,444 units.
Colby said the slowdown in business was a factor in the decision to sell Spirex. With the economy the way it is, we were struggling, but we were getting by, he said.
Xaloy was born in 1929, as Industrial Research Laboratories in California, which developed a hard, wear-resistant iron-boron alloy later patented and trademarked as Xaloy. The company pioneered bimetallic barrels for the plastics industry, and expanded into screws by acquiring Flametech Corp. in 1987.
Today, Xaloy supports customers in the United States, Europe and Asia.
Don Loepp, Plastics News managing editor, contributed to this story.
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