Graham Partners is taking another step in creating a nationwide network of regional blow molding companies, this time striking a deal to move into the Southeast.
The Newtown Square, Pa.-based private equity firm, through its Convergence Packaging affiliate, is acquiring Precision Medical Inc. of Hoschton, Ga., near Atlanta.
PMI, while starting out as a supplier to the health care industry, now focuses on producing both PET and high density polyethylene bottles and containers for the food and household chemicals industries.
“We are really trying to seek out and identify strong regional and niche blow molders and we saw PMI as another one of those examples of someone who has built a nice presence in an attractive market in a great geographic location,” said Ross Bushnell, CEO of Convergence Packaging, in a telephone interview.
“It just made sense for us all the way around,” he said.
Terms of the deal were not disclosed, but PMI joins Paradigm Packaging Inc. of Saddle Brook, N.J., and Scandia Plastics LLC of Sheboygan, Wis., in the Convergence Packaging blow molding platform. Paradigm also has operations in Upland and Rancho Cucamonga, Calif., near Los Angeles.
“What we've seen is a lot of larger companies consolidating across the industry. There's a lot of regional blow molders who are strong. But this market has seen significant consolidation. I think when you get to a certain size, it becomes really difficult to take care of local accounts and local customers,” Bushnell said.
“So our strategy is to go and identify these local, regional niche players and keep them focused that way. So we're not trying to roll them into one big national company. We know the big guys do great at what they do. What we want to do is be the best regional player in every market we participate in,” he said.
Part of that regional strategy, however, does include the idea of having coverage around the country. That would allow Convergence Packaging companies to support one another.
“We do like the notion of having a nationwide footprint. No question. We think that helps the regional guys, too,” Bushnell said.
“We see opportunities to use PMI as a baseline for expansion in the Southeast and helping us to reach that area on behalf of the other two businesses, Scandia and Paradigm. So we're very excited,” he said.
Paradigm makes bottles and jars for the vitamin, nutritional and over-the-counter drug and pharmaceutical markets. Scandia makes bottles, containers and light industrial parts for a variety of markets, including medical diagnostics, healthcare, household and industrial chemicals.
Paradigm was acquired by Graham Partners in December and Scandia in October 2012.
Bushnell and PMI founder James Hinshaw were introduced by a mutual friend and it took about six months for both sides to come together on a deal.
“The Graham Partners and Convergence team made it clear from the outset that they were committed to our market, to our customers and to our people,” Hinshaw said in a statement.
PMI runs around the clock during the week and as needed on weekends, Bushnell said. Operations include a manufacturing plant and a distribution center, both in the Atlanta area.
“We're starting to reach a geographic spread that looks more national, and we want to add to that,” Bushnell said. “We certainly are not done.”