You know the market for plastics materials is heating up when a new company can't even mark its first anniversary without being acquired.
That's what just happened to color concentrates maker Precision Colors. The Fort Wayne, Ind.-based firm opened its doors on Dec. 1 and was acquired by investment firm The Ellis Company on Aug. 12.
“This happened really quickly, but it will allow us to put more capital investment into the company and have deeper pockets,” Precision Colors founder and co-owner Robert Mann said by phone Aug. 13.
No purchase price was disclosed in the deal. Mann will stay with the firm and retain a minority ownership stake in the company, which has been renamed Precision Color Compounds.
Fort Wayne-based Ellis owns six other companies, including Jasper Plastic Solutions, a maker of high density urethane foam products in Syracuse, Ind. Mann said that Precision now might be able to supply Jasper with some materials.
Precision employs four and is on track to post sales of $1 million in its first year of operation, making color concentrates based on polyethylene and ABS for construction, consumer and medical markets. The firm operates one twin-screw extrusion line and a continuous mixer. Mann said Precision may add a new single-screw or twin-screw extrusion line by the end of the year.
Before founding Precision, Mann's plastics experience included 14 years with materials firm Color Master Inc. and a four-year stint with sheet extruder Royalite.
The number of global plastics materials deals actually fell from 37 to 26 in the first half of 2015, according to P&M Corporate Finance of Southfield, Mich., but investment pros have said that interest in the sector remains high. The lower number, they said, was a result of fewer firms being up for sale.
The pace of materials deals appears to be increasing in the second half, with Plastics News reporting three such deals in the last two weeks alone. In that time, Italy's Radici Group bought the nylon business of Resinas TB of Mexico; Petlon Polymers of the U.K. acquired brands, assets and customer lists from U.S. materials firm Teknor Apex; and RTP Co. of Winona, Minn., snagged Polymer Partners, a compounder and concentrate maker in Henderson, Ky.