KENOSHA, WIS. (May 21, 12 p.m. ET) — Xten Industries LLC has expanded its injection molding business by acquiring Paramount Plastics LLC of Lockport, Ill.
Xten of Kenosha, Wis., announced the deal May 18, the day it became effective.
Paramount with annual sales of $18 million specializes in large-tonnage molding using engineering resins, especially for automotive markets. It was founded in 1990 and runs 24 presses with clamping forces ranging from 60 to 2,000 tons in a 122,000-square-foot facility. Shot sizes vary from 5 grams to 26 pounds, Xten said in a news release. It also uses robotic automation and partakes in markets in industrial, consumer durables, health and fitness and packaging.
Xten had 2011 injection molding sales of $20.2 million on its 29 presses. Its previous largest press was a 900 tonner, said Xten CEO and cofounder Matthew Davidson in a telephone interview.
“A primary reason to buy Paramount was to increase molding capacity and clamp tonnage,” Davidson explained. It had an option to buy bigger presses but the acquisition route was more attractive. Xten had been subcontracting out some of the large parts its customers wanted.
“This [acquisition] will take care of our needs for three years, but if we're more successful than we expect then we could buy new presses” Davidson said. Paramount brings in a range of new customers.
“In addition to the larger equipment, we've gained the operational experience of Paramount's people,” noted Xten President and operations leader Bill Renick in a news release. “Out of the due diligence process, we came to realize how much they have contributed to Paramount's success and feel fortunate to have them now within the Xten family.”
Xten predicts total sales of about $45-million in 2012. The injection molder and product fabricator was founded in Chicago in 1940 as Hauser Plastech. Davidson and a partner bought the business in 2000 and two years later moved it to a bigger, new plant in Kenosha. Xten was recently named to KenoshaCounty's 2011 business of the year award.
“We were at the crossroads of having considerable growth and a need to reinvest,” explained former Paramount vice president of sales Matt Simpson in a telephone interview. “Xten talked to a broker who brought up the [purchase] idea to us. It was the right time for Xten to expand the business.”
Simpson and other management sold Paramount for undisclosed terms. He and some other former owners will continue as outside sales representatives with Xten while others will retire.
Paramount employed 90 while Xten's staff was at the 85 level. Both production plants will continue operating but some machinery may be swapped between operations depending on customer needs.
Davidson said his firm has seen some molding work return to the United States from China in the past few years to save on shipping costs across the ocean to supply U.S. markets
Xten offers final fabrication and drop shipping for most of its customers. Its auxiliary services include part and tool design assistance, in-mold decorating, inventory management and logistics solutions.