Rotonics Manufacturing Inc. is selling its tank-manufacturing division to Norwesco Inc. and Snyder Industries Inc., in a blockbuster move for the rotational molded tank business.
Rotonics, which is owned by Spell Capital LLC, announced the sale Aug. 6. The company will keep its custom fuel tank business and other assets.
A news release from Rotonics said the company wants to focus on other markets. The sale of the tank group's business assets is the result of a strategic assessment to shed non-core assets and leverage Rotonics' strong market position in its primary business segments, including custom molding, material handling, linen and laundry, refuse, medical waste, custom pallets and utilities.
Rotonics CEO and President Richard Leary said in an Aug. 6 phone interview the deal includes molds and equipment to make tanks, but no factories.
Spell had moved Rotonics' headquarters from Gardena, Calif., to Commerce City, Colo., and installed new top management. In the past year, Rotonics has consolidated nine plants into four centralized facilities in Gardena, Commerce City, Maple Plain, Minn., and Bensenville, Ill. The firm has closed or sold plants in Texas, Tennessee and Florida.
The deal marks a major consolidation in the rotomolded tank business the largest single category for the sector and involves owners that are from the private equity ranks. Terms of the asset sale were not disclosed.
Norwesco and Snyder are already major tank rotomolders, and both have common ownership under Olympus Partners, a private equity firm based in Stamford, Conn. Olympus bought Norwesco and Snyder in 2008.
Minneapolis-based Spell Capital bought a 75 percent interest in Rotonics in 2006, when founder Sherman McKinniss took the company private. McKinniss still has an ownership stake in the business, Spell Capital said. He could not reached for this story.
The deal involves three of the 10 largest players on Plastics News' sales-based ranking of North American rotomolders. Norwesco stands at No. 4, with estimated 2009 sales of $96 million. Snyder is No. 5, with estimated sales of $94 million.
Norwesco makes tanks only, while Snyder Industries makes tanks and some other industrial and custom products. Plastics News lists them as two separate companies, although Olympus Partners owns both.
Rotonics reported 2009 sales of $66 million, placing it No. 8 on the ranking. Its sales came from tanks and a range of other products, including buoys and pontoons, lamp-post reproductions, linen and laundry carts, bins and pallets, refuse containers and liquid-storage tanks.