Timewell Drainage Products, a family-owned and operated high density polyethylene pipe producer based in Timewell, Ill., has expanded its customer reach and added blow molding capabilities with the acquisition of Midwest Plastic Products.
Timewell is buying the business from Minneapolis-based private equity firm of Spell Capital Partners LLC, which bought the business in 2014.
Terms of the deal, which closed Sept. 30, were not disclosed except that Timewell will continue to operate Midwest Plastic's manufacturing facilities in Jefferson, Wis., and Plainfield, Iowa. The acquired business makes mostly drain tiles and fittings aimed at the agricultural and commercial sectors. Marketed as “overachievers underground,” Midwest Plastic is a good fit for Timewell for three reasons: heritage, geography and capabilities, according to Aaron Kassing, Timewell's vice president of marketing.
“The company has heritage — over 40 years in business and a great workforce with good tenure, and there's tremendous value in that,” Kassing said in a telephone interview. “And, the geography is a dynamite area. Up until this acquisition, it was difficult for us to service customers in areas of Wisconsin, northern Illinois, northeastern Iowa and even parts of Minnesota. This really positions us very well in that regard.”
Then, there's Midwest Plastics' blow molding operation, which produces the fittings that Timewell uses, as well as tanks for other industries, which diversifies the acquirer's product line.
“We're going to be able to blow mold all of the fittings that we use,” Kassing said. “That part's very exciting.”
In particular, Midwest gives Timewell the ability to blow mold single-wall fittings, and Timewell gives Midwest the ability to offer a complete product line, including Maxflo dual wall pipe, injection molded fittings and fabricated fittings.
Despite overall weakness in the agriculture sector, Kassing said Timewell is in a growth mode with drainage products evolving from a fad to a standard way of maximizing crop yield.
“Things have slowed down tremendously, up to 40 percent, with projections of greater fall backs, but that hasn't been the case with the drainage industry,” he said. “Growers and farmers realize they only have so much money to invest in a year. Drainage systems and water table management are the directions they are going because of extreme weather and the absolute necessity to be competitive. Farming is a competitive business. Any edge you can get, you must take.”
The purpose of a sub-surface drainage system is to lower the water table in the soil after a big rain to prevent crop injury. Excess water is removed to a level where it won't interfere with plant root growth and development, which affects the productivity of the farm. In Iowa alone, more than 6 million acres of cropland have problems with excess water, according to an analysis by Iowa State University.
“We're experiencing a rush because people see the results they can get from our products and services,” Kassing said. “It's the No. 1 infrastructure investment they can make, and it becomes an opportunity.”
There's one other thing Kassing, who has been with Timewell since 2001, likes about the deal with Midwest Plastics, which was founded in 1972 by Gary Fish.
“It's a good marriage, a good union in terms of a company that started out as family company and is now rejoining us — a family-owned company — after having been owned by a private equity firm,” he said.
For the new combined company, Darren Wagner stays on as president and Dawn Lucas, who was president of Midwest Plastic, continues to oversee those operations as general manager of the Plainfield and Jefferson facilities. All employees will keep their jobs, bringing 50 new workers into the Timewell business for a total of about 300.
“This purchase positions Timewell to be a leader in the water table management and HDPE pipe industry,” Timewell President Darren Wagner said a news release. “The combined company will be ideally situated to serve the corn belt with high quality drainage products and industry leading customer service.”
Lucas agreed the acquisition is a good match for Midwest Plastics, its employees and customers.
“I'm happy to be part of this transition and the company's future growth. We are in the right place,” she said in a news release.
In addition to its Illinois headquarters, which has five extrusion lines, Timewell has operations in Sibley, Iowa, and Providence, Ky., with three lines each for a total of 11, according to a July video about the company. Kassing would not say how many blow molding and extrusion lines Timewell picked up in the acquisition.
Timewell also recently invested $1 million into new testing equipment and additional staff, the video says. The business is owned by Don and Susan Colclasure.