Mirek Planeta has sold Macro Engineering & Technology Inc., the manufacturer of equipment for making blown and cast film that he started in 1978. The buyer is a publicly traded Chinese company, Dalian Rubber & Plastics Machinery Co. Ltd.
Mississauga, Ontario-based Macro Engineering announced the deal Nov. 9. The transaction closed in late October.
The deal was priced at C$8.5 million (US$8.3 million), according to DRP of Dalian, China.
More than 80 percent of Macro's business comes from outside of Canada. Macro, which employs more than 100, has a sales presence in China and the Czech Republic.
“Macro's products have stable customer base in the U.S., Canada, Germany, Brazil, Japan, India and China,” DRP said in a news release. “Despite Macro's advantages in [research and development], its production capability is relatively weak. … The acquisition will enable both companies to grow margins,” DRP added.
Planeta, the sole owner of Macro and its holding company, Apollo Marketing International Inc., said he made the connection with the Chinese machinery maker through his international contacts. “We do lots of business in China,” he said. “It was introduced through a friend.”
Planeta, 65, said he is reaching retirement age and wanted to sell. He will remain as Macro's president for two years and then become a consultant to the company for five years. Macro will continue to run autonomously and retain its key management personnel, he said.
Planeta came to Canada from his native Czechoslovakia in 1974. He built Macro Engineering & Technology into an innovative maker of film equipment, by focusing on technology and special applications, including multilayer blown film lines and custom-built winders.
“We never tried to compete in the mass-produced machinery. We specialized in the special machines, special developments. This was always our niche,” Planeta said Nov. 22 by phone.
The deal will allow Macro to speed up an expansion project at its headquarters in Mississauga, announced earlier this year. The headquarters is 85,000 square feet, and the firm leases an additional 55,000 square feet of space in Mississauga. Macro is building a 32,000-square-foot addition.
DRP, founded in 1907, was a state-owned enterprise prior to its initial public offering in 2001 on the Shanghai Stock Exchange. Presently, its controlling shareholder is the Dalian State-owned Assets Management Co. Ltd.
The deal was between Apollo Marketing International and DRP's wholly owned Canadian subsidiary, Dalian Rubber & Plastics International Enterprises Inc.
Partially audited data show that, for fiscal 2009, Macro reported C$23.8 million (US$23.2 million) in sales and C$350,000 (US$341,000) in net profit. The company had C$14.46 million (US$14.12 million) in total assets, C$7.52 million (US$7.34 million) in liabilities, and C$6.94 million (US$6.77 million) in net assets.
DRP will pay cash for the company. However, the price will be adjusted if the 12-month earnings before interest, taxes, depreciation and amortization ending Dec. 31 turns out to be below C$6 million. Half of the shortfall amount will be deducted from the price.
DRP believes the acquisition will help integrate Macro's strong R&D capability with DRP's production advantages.
The company said it will leverage Macro's brand and “strengthen and expand” Macro's business share in the higher-end market. The deal also will help DRP explore the midrange market, the firm said.