Multi-material polymeric components supplier Unique Fabricating Inc. is looking to enter new markets and negotiating to buy an unnamed business, the company states in the prospectus for its initial public offering.
Unique launched its IPO on July 1 and is trading on the New York Stock Exchange under the ticker symbol UFAB. It began trading at $11 per share and ended its first two days of trading up at $12.45 per share.
Unique said in its prospectus that it is negotiating to acquire an unnamed business that makes molded polyurethane components for the auto, industrial, off-road vehicles, office furniture, medical and packaging markets. The proposed purchase price of the deal is $12 million. The target business has sales of about $9.9 million and net income of about $1.3 million. The deal is contingent on due diligence and other conditions and there is no guarantee Unique will finalize it, the firm said in the prospectus.
Separately, Unique said it has identified opportunities for its die-cut and molding technologies in medical and industrial markets it does not currently serve.
Company officials were not immediately available to comment on the potential acquisition and new applications.
Unique, based in Auburn Hills, Mich., already has expanded its market reach through two recent acquisitions. Diverse but traditionally weighted to supplying automotive and appliance customers, the company entered heating and air conditioner markets and boosted its stake in other sectors with the acquisition of PrestoTech Industries Inc. in December 2013. It also bolstered its processing abilities when in February 2014 it bought Chardan Corp., a specialist in engineered vacuum thermoforming and fusion molding.
Unique claims its several manufacturing plants are near most of the major automotive and appliance OEMs. The firm supplies the sectors with multi-material components that include foam, rubber and plastic for applications such as noise and vibration management, air sealing, decorative parts and other functional end-uses. Its processing technologies include thermoforming, compression molding, die cutting and fusion molding, which is a foam molding process for precise, 3-D components.
Automotive is Unique's key market, accounting for some 80 percent of sales. In its prospectus, Unique said it expects North America's auto industry will continue to recover from the low point of 2009. Citing industry sources, the company forecasts vehicle production should reach 17.4 million units this year, about 2 percent higher than in 2014, and that by 2021, production could hit 19 million units. Besides unit production growth, Unique said lightweighting and other auto strategies should increase per-vehicle content for the kinds of components it makes.
Unique pointed to a lightweight, flexible air duct system for an undisclosed OEM as an example of it capturing increased plastics content. The firm helped develop and is producing a thermoformed air duct system that weighs 80 percent less than the previous system. Unique also has development and prototype contracts with four other vehicle OEMs that could lead to further adoption of the thermoformed air duct system as early as the 2016 model year.
Appliance, HVAC and water heater markets account for about 15 percent of Unique's sales. Citing industry statistics, the firm indicated U.S. housing markets have a healthy outlook and appliance shipments are forecast to grow 3.5 percent a year through 2017.
When expenses and commissions are factored in, Unique had estimated in its IPO filing that it would net about $20.5 million.
Unique will use the IPO proceeds to pay down debt, much of it incurred by its two recent acquisitions. Taglich Private Equity LLC of New York has been Unique's majority shareholder since early 2013.
Unique's sales for the first quarter of 2015, at $32.4 million, were 11 percent higher than a year earlier. Net profit of $1.2 million was 158 percent above the 2014 quarter. It estimates North American markets for its types of components core business amount to about $500 million annually. Unique said no one company is dominant but it believes it is the biggest producer of its kinds of components.
Unique manufacturing operations are in Lafayette, Ga.; Bryan, Ohio; Louisville, Ky.; Evansville, Ind.; Fort Smith, Ark.; Murfreesboro, Tenn.; and Queretaro and Monterrey, Mexico.