It could have been a blockbuster announcement at NPE2018, but due diligence got in the way.
The two sides in Brampton Engineering Inc.'s acquisition by Davis-Standard LLC were working on a deal as NPE approached, and they were hoping to announce a deal at the trade show in May. But the usual process of completing due diligence didn't happen fast enough, according to Brampton Engineering CEO Gary Hughes.
"It was our goal to say during NPE that the deal was done," Hughes told Plastics News in a June 4 phone interview. "But we had to go through the process."
News of the acquisition finally broke June 1 when Pawcatuck, Conn.-based Davis-Standard announced it was buying the blown film machinery maker. Both companies declined to provide terms of the acquisition, but Hughes did say that Brampton Engineering's top executives were very hopeful the acquisition could be done.
"We needed to bring in new equity," said Hughes, who will continue in his current role at the company. "We are in a very fast-growing market segment, and we needed more capital to support our growth."
Brampton Engineering's management liked the idea that an industry player could own their company rather than a private equity firm.
"We are like-minded in many ways," Hughes explained, adding that the deal results in an "exceptionally strong supplier" in North America.
Brampton Engineering's focus on multilayer blown film, for instance, helps fill out Davis-Standard's broad extrusion and converting machinery lineup.
"Brampton Engineering is a well-known brand with a rich history and a strong customer base," Jim Murphy, president and CEO of Davis-Standard, said in a June 7 email.
"The combination of Brampton Engineering and Davis-Standard broadens our capabilities in the multilayer barrier film segment to better serve our customers in the packaging industry," he added.
Murphy declined to confirm whether Davis-Standard was planning to announce the acquisition at NPE, where the company rolled out a new logo, slogan and website.
"We do not comment or announce acquisitions until they are complete," he explained.
Davis-Standard bought Brampton Engineering from Hughes and two management colleagues, who bought it in 2015 from private equity firm RBC Capital Markets. RBC had owned it for about 14 years.
Prior to that, ownership centered around well-known extrusion expert Bill Wybenga, who will continue to provide consulting services under Brampton Engineering's new ownership. Hughes joined Brampton Engineering in 2013 as its new president and CEO. The company has approximately 90 employees.
"Brampton Engineering's management team and employees will continue in their current location in Brampton, Ontario," Murphy said.
In September 2017, Davis-Standard bought Maillefer SA, a Swiss-based machinery maker for the extrusion coating of wire and cable as well as the production of pipe and tubing.
Murphy told PN correspondent Don Detore in May that Davis-Standard was not actively pursuing other companies.
"There's a lot of small- and medium-sized players in the industry," Murphy said during an interview at NPE. "In most industries, where you see that fragmentation, you see consolidation over time. We fully expect those things to occur because that's what the market generally does — consolidate.
"We're market participants; we're always aware and interested, but there's nothing imminent. We're focused on, from a technological standpoint, extrusion technology as a core competency and controls technology to support that. Business and product lines that are consistent with our core capabilities are very interesting and ones that have a deep technology advantage in the market."
Davis-Standard employs more than 1,250 workers worldwide. The company has manufacturing and technical facilities in the United States, Canada, China, Germany, Switzerland, Finland and the United Kingdom.
Since late 2011, Davis-Standard has been owned by Oncap, a middle-market investing unit of Canadian private equity firm Onex Corp. Onex previously owned injection molding machinery maker Husky Injection Molding Systems Ltd. until it sold Husky in 2011.