Xten Industries LLC has expanded its injection molding business by acquiring Paramount Plastics LLC of Lockport, Ill.
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 of 60-2,000 tons and shot sizes of 5 grams to 26 pounds, Xten said in a news release.
Paramount also uses robotic automation and serves markets including industrial, consumer durables, health and fitness, and packaging from its 122,000-square-foot facility.
Kenosha, Wis.-based Xten had 2011 injection molding sales of $20.2 million and 29 presses. Before the Paramount purchase in May, Xten's largest press was a 900-tonner, said Xten CEO and co-founder Matthew Davidson in a telephone interview.
“A primary reason to buy Paramount was to increase molding capacity and clamp tonnage,” Davidson said. Xten had an option to buy bigger presses, but the acquisition route was more attractive, he added. 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,” said Bill Renick, Xten president and operations leader, 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 projects 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 received Kenosha County's 2011 Business of the Year Award.
“We were at the crossroads of having considerable growth and a need to reinvest,” said Matt Simpson, former Paramount vice president of sales, in a phone 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 U.S. 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. Its auxiliary services include part and tool design assistance, in-mold decorating, inventory management and logistics.