Davis-Standard LLC is entering the thermoforming equipment market with its latest acquisition.
The Pawcatuck, Conn.-based maker of extrusion and converting equipment bought Thermoforming Systems LLC in Union Gap, Wash. TSL makes thermoforming equipment for the North American food packaging industry that can be used to produce a variety of plastic cups, hot or cold lids, food containers, and ventilated or tamper-evident products.
Terms of the deal were not disclosed.
Jim Murphy, president and CEO of Davis-Standard, said in a Nov. 28 phone interview that the company has worked with TSL in several customer facilities throughout North America and around the globe on thermoforming projects, specifically in food service applications.
"When there was an opportunity to bring the two companies together, we sought out that opportunity, as TSL is a market leader in thermoforming equipment technology, and it's a strong complement to our sheet extrusion business," Murphy said.
James Naughton, formerly president of TSL, will stay on to lead the TSL business as executive vice president and a member of the Davis-Standard executive management team. He said Davis-Standard's longstanding reputation as a leader in extrusion technology made the company a "preferred partner" to work with for the deal.
"First and foremost, [Davis-Standard] is a manufacturing company, so they understand our business," Naughton said in a phone interview. "As a potential acquisition, we felt that with their background and their market leadership, they were the right partner to go forward with."
Naughton said the "timing was right" for TSL, which recently saw one of its eight managing partners retire.
"The rest of us managers have stayed on and reinvested, and are moving forward together," he said. "We're all pretty excited about the opportunities of working with [Davis-Standard] as a market leader."
TSL employs around 100 people at its Union Gap facility, a roughly 70,000-square-foot building that was expanded by 20,000 square feet two years ago — an investment of approximately $1.5 million.
"Our thermoformer sales, we've seen a lot of growth in food service," Naughton said. That includes plastic products like specialty beverage cups and lids of all shapes and sizes as well as to-go containers, he said.
For Davis-Standard, packaging is its "largest single end market," making up about 45-50 percent of the end markets it serves, Murphy said. Other key markets are energy and infrastructure products, automotive, building and medical.
The acquisition marks the second this year for Davis-Standard. In June, the company announced it had purchased Canadian blown film machinery maker Brampton Engineering Inc. in Brampton, Ontario. The two companies had planned to make it a blockbuster announcement at NPE2018 in May, but due diligence slowed the process.
That deal further amped up Davis-Standard's blown film division, following its 2015 acquisition of Gloucester Engineering Co., a major U.S. extrusion machinery maker in Gloucester, Mass.
"We're an active participant in the market and as opportunities come about, those will be looked at," Murphy said. "And if we think we can bring value to the acquisition and be able to better position ourselves in the market with the technology and services we could offer, that's always something interesting to explore."
Since 2011, Davis-Standard has been owned by Oncap, a middle-market investing unit of Canadian private equity firm Onex Corp.
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.
