Molder Dickten Masch Plastics LLC has a new owner ready to finance an expansion that will take the company into new regional and global locations.
Privately owned Patmian LLC purchased Nashotah, Wis.-based Dickten Masch from Everett Smith Group in a deal announced April 19 for an unspecified amount. Patmian's principal investor is George Votis, the former leader of injection molder Moll Industries Inc., although Patmian will focus on finances and leave Dickten Masch's existing management company in control of operations. The acquisition is the group's first investment.
I'm very excited to have an owner that shares our vision, said President and CEO Steve Dyer in an April 21 telephone interview. Our customers are demanding that we have global presence and local support regionally and internationally as their production needs move and change.
That means taking Dickten Masch beyond its existing operations with two plants in Nashotah and Ankeny, Iowa probably beginning with an investment in the southeastern United States.
Primarily because we service a lot of customers in the Southeast, Dyer said. We ship a lot of product into Tennessee, Alabama, Georgia, South Carolina. A regional presence will allow us to support those key customers better.
Dickten Masch has both injection molding of thermoplastics as well as thermoset molding with customers across a variety of industries including automotive, medical and power generation. During the past two years, it has refined itself as a full-service provider of finished parts and a problem solver for its customers, rather than solely an injection molder. It is a new view with vertical integration that takes in everything the company did previously from mold design and production to having its own material laboratory and on through molding but now with an emphasis on a complete engineering package.
The company even invested in a metal-stamping line to make steel components for insert-molded parts it previously purchased.
I didn't get into the business looking to become a metal stamper, Dyer said. It's a matter of controlling our destiny.
Vertical integration improves lead time and cuts the need for weeks and weeks of inventory.
That complete-package concentration has won it more business as customers have looked to consolidate their supply bases and even has brought it work previously molded in China, he said.
At the same time, the company cut expenses as the economy slowed, and Dyer said that during the past two years, it added 10 percent to its business line while also slashing 50 percent of its selling, general and administration expenses.
We feel like we came out of this better and more focused, Dyer said.
That is exactly the type of company that financial buyers such as Patmian will be looking for as the mergers and acquisitions market begins to rebound from the recession, said David Evatz, director of investment banking for Stout Risius Ross Advisors LLC, which helped to advise Everett Smith Group during the sale.
Private-equity money is beginning to make its way back into the market after nearly two years, but buyers are very cautious about what companies they want to invest in.
[Dickten Masch] has a strong management team and they have done a number of things with the business so that they're really well positioned, Evatz said.
With Patmian, Dickten Masch now becomes the center of a new platform strategy and can be a player in the consolidation of contract molders, rather than risk being swallowed up by another company, he said.
Evatz expects more financial buyers to complete purchases during the coming months, although the auto industry may be slower to see that increase.
Dyer said Voltis' experience in the plastics industry gives Patmian an edge in understanding the plastics industry and DMP's requirements. All of the company's key managers have stayed with the company under the change in ownership.
We have a marquee group of customers, he said. Our focus now is going to be finding ways to better serve this core group of customers and judiciously managing global growth to put us into locations where we need to be.
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