Nordson Corp. is making another major acquisition in the plastics market, announcing June 4 that it has a deal to buy New Castle, Pa.-based Xaloy Superior Holdings Inc.
Xaloy is the largest U.S. maker of screws and barrels used by injection molders and extruders, and a major supplier of melt pumps, screen changers, cleaning ovens and water-ring pelletizers used by extruders.
Westlake, Ohio-based Nordson, a publicly traded company, said it will pay $200 million for Xaloy, subject to adjustments. The deal is scheduled to close in the third quarter.
Ron Auletta will remain as Xaloy's president and CEO, a Nordson spokesman said.
A year ago, plastics industry observers might have said, “Who's Nordson?” in response to the company's acquisition of Value Plastics Inc., an injection molder of single-use medical fittings in Fort Collins, Colo.
But with the Xaloy deal, Nordson becomes a big name in plastics — especially considering that just a few weeks ago it announced an agreement to buy Extrusion Dies Industries LLC, which makes flat dies and extrusion coating dies. Nordson also is paying $200 million for EDI Holdings Inc., with the final price subject to adjustment.
Nordson will pay for both companies using its existing lines of credit.
Xaloy has operations in the U.S., Germany and Thailand, and will become part of Nordson's Adhesive Dispensing Systems segment.
“By adding this capability to our recent extrusion die product line acquisitions, Nordson now brings the industry a truly unique offering that combines the critical elements of both material flow and dispensing,” said Nordson President and CEO Michael F. Hilton in a news release.
“This offering is analogous and complementary to the same highly successful model Nordson employs today within its hot-melt adhesive dispensing product line for rigid-packaging manufacturers.”
Nordson makes equipment for applying industrial liquids, adhesives, sealants and powder coatings, gas plasma and other surface-treatment equipment, for a range of consumer and industrial products.
Officials of Nordson were not available for comment beyond the news release.
Xaloy celebrated its 80th anniversary in 2009. That year the company also made a major acquisition of its own, buying Spirex Corp., its rival in nearby Youngstown, Ohio. Xaloy was already the largest maker of screws and barrels, since it had purchased New Castle Industries Inc. in 2003. The Spirex deal made it even bigger.
The company had expanded into gear pumps, screen changers, cleaning ovens and water-ring pelletizers in 2006 when it bought the extrusion business of Dynisco LLC.
Ownership of Xaloy changed hands in 2008 when Industrial Growth Partners Industries LLC of San Francisco bought the company from another private equity owner, Baird Capital Partners.
Nordson is buying Xaloy from IGP.
One screw-industry executive, Glycon Corp. President Jeffrey Kuhman, said he knew Xaloy was for sale, but thought it would go to another private equity company. Nordson is a strategic buyer, and because the company is a newcomer to screws, barrels and dies for plastics, Kuhman is eager to know what the strategy is, and if Nordson will bring any new technology to the components sector.
“We think it's an interesting marriage,” said Kuhman.
He said Glycon, of Tecumseh, Mich., licenses its non-return valves to Xaloy, and buys barrels from the New Castle company.
At the time of the Spirex deal, Plastics News estimated that the combined Xaloy and Spirex had annual sales of about $130 million and about 730 employees.
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.
Xaloy's plant in Asia is in Chonburi, Thailand, and its European plant is in Neckarsulm, Germany.
Nordson, which is traded on Nasdaq, posted 2011 sales of $1.2 billion and operating profit of $316 million.