Naples, Fla. — Actions taken after a merger or acquisition can be just as important as those taken before, according to members of an industry panel at the 2018 Plastics News Executive Forum.
When plastics packaging maker Comar LLC was sold to private equity firm Graham Partners in 2014, the deal allowed the firm "to grow and bring in new talent, and pursue the vision we had set," Comar Chairman and CEO Michael Ruggieri said at the event, held March 6-7 in Naples.
"In our case, the founder of the company had moved on and the new owners were accelerating growth," added Derrill Rice, president and CEO of injection molder Plastic Components Inc. in Germantown, Wis. Owner Tom Duffey sold PCI in 2017 to private equity firm MPE Partners of Cleveland.
Being acquired in 2017 by French private equity Ardian has allowed injection molder Revere Plastics Systems LLC of Clyde, Ohio, to have "capital and an appetite to invest," according to CEO Glen Fish.
Injection molder Nicolet Plastics LLC of Nicolet, Wis., has continued to look for bolt-on acquisitions since former owner Robert Macintosh sold the firm to Badger Mining Inc. last year, Macintosh said on the panel, which was moderated by John Hart, managing director of Plante Moran Corporate Finance in Southfield, Mich.
Working with private equity has allowed Comar to recruit more talent, Ruggieri said, and has given PCI "a strong M&A pipeline," according to Rice.
And more private equity interaction could be in Comar's future. "As we grow, we'll outgrow Graham as investor," Ruggieri said. "We may have several equity partners as the business develops and grows."
Macintosh sold his firm to another local company in Wisconsin — not to a private equity firm — which allowed Nicolet to keep its employees in the area. The sale went smoothly, but he admitted that the last day "was a long day — it was exhausting."
Macintosh still is in the office at Nicolet one or two days a week, helping the new owner look at other companies "that might be good fits."
"Greenfield startups are a lot more risky," he said. "Acquisition seems to be the way to go right now."
Revere also is looking for acquisitions that it can incorporate into its own operating system, Fish said. Comar is seeking to add capabilities and geographic reach through acquisitions, which Ruggieri said are "easier and faster than greenfields."
PCI, according to Rice, is looking for companies "with new capabilities that will allow us to develop technology."
"One plus one has to equal more than two," he said.
