Automotive parts molder Toledo Molding & Die Inc. has expanded its blow molding business by acquiring WEK Industries Inc., a former Myers Industries Inc. company.
Toledo paid about $19.5 million for WEK in a deal announced June 24. WEK had sales of $36 million last year, mostly in custom blow molded auto parts and assemblies, although it also molds custom and proprietary products for other sectors, such as trash and recycling bins and dock floats.
WEK, with headquarters and blow molding operations in Jefferson, Ohio, also runs a blow-molding plant in Reidsville, N.C.
Toledo Molding has its headquarters and testing laboratory in Toledo, Ohio, and also runs a technology center in that city that houses its prototyping and tool design and build capabilities. It does blow molding in Bowling Green, Ohio, and Tiffin, Ohio. Tiffin also contains injection molding activities as does a plant in Delphos, Ohio. Another Toledo operation does cockpit assembly and sequencing.
“We are excited to support our platform investment in [Toledo Molding & Die] with the strategic acquisition of WEK,” noted Adam Gottlieb, senior managing director of Industrial Opportunity Partners, the Evanston, Ill., private equity owner of Toledo Molding. “We believe TMD is positioned for growth both internally and through strategic acquisitions such as WEK. WEK represents TMD's first acquisition since [Industrial Opportunity Partners] invested in TMD in 2011.”
Toledo Molding produces and assembles thermoplastic parts for interior cockpit modules and air and fluid management components. It has about 1,500 employees. On its website it states its injection presses have clamping forces ranging from 15-3,300 tons. Its blow molding machines for polyolefins and thermoplastic elastomers can run shot sizes of 5-25 pounds in up to 70-inch part length.
“The transaction allows WEK Industries to become part of Industrial Opportunity Partners' portfolio of custom businesses and better positions the business for growth,” stated Myers President and CEO John Orr in a news release. WEK will be reported as discontinued operations in future Myers financial filings.
The acquisition expands Toledo Molding's customer base at a time when the automotive industry is doing well, said IOP chairman and operating principal Jim Todd, in a news release.
Myers Industries sold WEK to concentrate on its core businesses. It will use the sale proceeds to partly pay for its upcoming $165 million purchase of Scepter, a Toronto-based fuel tank blow molder and materials handling products injection molder. Myers said it expects to complete that acquisition in early July.
Wells Fargo Securities estimated the WEK purchase price was about four times earnings before interest, taxes, depreciation and amortization. The research firm said Myers' streamlining is a step in the right direction and it gives the company its “market perform” rating.
WEK was part of Myers' engineered products segment, which has disappeared in a realignment to reduce Myers' reporting segments to two from four. Myers now has a material handling segment and a distribution segment. The material handling segment includes operations that were already under that umbrella and the Ameri-Kart fuel tank business that was formerly part of engineered products. Scepter will be added to the material handling segment.
Myer first announced the Scepter purchase agreement on June 2, the same day it said it is looking for a buyer of its lawn and garden segment, a process that could take up to a year.
Western Reserve Partners LLC of Cleveland was financial adviser to Myers.
“This was a highly competitive process with several parties showing strong interest in the business,” noted Western Reserve managing director Kevin Mayer in a news release.