Fresh off an NPE show where the company made a big splash, Milacron LLC — the largest U.S. plastics machinery company — today announced plans for an initial public offering.
The Cincinnati-based company on April 3 filed a Form S-1 with the U.S. Securities and Exchange Commission disclosing plans for an IPO on either the New York Stock Exchange or NASDAQ Global Market.
The company plans to raise an as-yet undisclosed amount of money for general corporate purposes, including repayment of outstanding debt.
In the S-1, Milacron describes itself as a global leader in the $27 billion plastic technology and processing industry.
“We are the only global company with a full-line product portfolio that includes hot runner systems, injection molding, blow molding and extrusion equipment,” the company said. Milacron has “strong market positions across these products,” as well as leading positions in process control systems, mold bases and components, maintenance, repair and operating supplies for plastics equipment.
Milacron claims leading market shares in several key products:
• No. 1 in plastics processing equipment in North America.
• No. 1 in injection presses in India.
• No. 2 in hot runners globally. That includes No. 1 positions in North America and Europe, and No. 2 in Asia.
Milacron generated 2014 sales of $1.211 billion, according to the S-1. The company posted adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $199 million, and adjusted net income of $75 million, but a net loss of $14.9 million.
That compares to 2013 sales of $1.028 billion. Adjusted earnings in 2013 were $54.3 million. Milacron posted a net loss of $24.7 million in 2013.
The majority of the company's sales are from plastics machinery — what the company calls its Advanced Plastics Processing Technologies unit. That business generated 2014 sales of $675.8 million, compared to $406.7 million for Melt Delivery and Control Systems, which includes hot runners.
Milacron said it has 27,000 customers, and said it has achieved significant growth since 2012 through acquisitions and capacity investments in China and India.
Milacron also said it is been making significant investments in low-cost manufacturing overseas, which will help drive improvement in its profit margin over the next three years. The company also cited its "One Milacron" initiative, which it highlighted at NPE 2015 in Orlando, Fla., as a way of leveraging its diverse global capabilities.
Opportunities for growth
While the company has benefited from a rebound in machinery sales since the Great Recession, according to the S-1 Milacron expects to see additional growth thanks to pent-up demand.
“We believe that many processors deferred investment in new equipment in the United States in the decade from 2000 to 2010 as they invested in emerging markets and delayed replacement during the 2008-2010 recession,” the company said in the S-1.
“Since 2010, many customers have reinvested in their North American plants due to rising demand and the improved competitiveness of North American manufacturing. We believe much of the equipment purchased in the 1980s and 1990s is now nearing the end of its useful life, and the plastic processing industry will experience sustained growth as customers begin to make significant investments in machinery and equipment due to strong plastic demand, lower resin costs and a more robust manufacturing environment.”
Milacron cited several markets as being particularly promising, including automotive and construction.
“In 2014, we experienced a 14.1 percent increase in sales of extrusion equipment and tooling compared to the prior year, which reflects the continued recovery in the residential and non-residential construction markets.”
Return to Wall Street
For Milacron, an IPO actually will mark a return to the stock market.
The company's history dates back to 1860, when it was founded as Cincinnati Screw and Tap Co. — it was officially incorporated in 1884. The metal milling company entered the injection molding machinery market in 1968, and was renamed Cincinnati Milacron in 1970.
The company filed for Chapter 11 reorganization during the depths of the Great Recession in 2009. It was purchased by a private equity firm, then sold to its current owner, another private equity firm, in 2012.
The current owner, CCMP Capital Advisors LLC, will continue to own more more than 50 percent of the voting shares in the company, according to the S-1 filing.