Plastic Components Inc. made its first play in the strategic game of mergers and acquisitions earlier this month with the purchase of Syracuse Plastics of North Carolina Inc.
The deal was announced March 5. Terms were not disclosed.
The move is part of the Germantown, Wis.-based custom injection molder's strategy for big growth under buy-and-build private equity firm MPE Partners. PCI has been owned by the firm, which has offices in Boston and Cleveland, since 2017.
"[MPE Partners] encouraged us to develop a strategy that employs both organic growth and inorganic growth," PCI CEO Derrill Rice said in a March 11 phone interview.
During the first year under the private equity firm's ownership, PCI focused on strengthening its product pipeline and building customer relationships.
"For the second year, we've been very aggressive in developing an M&A pipeline to help us grow from an inorganic standpoint also," he said, adding that more acquisition activity is expected in the future.
But PCI's first acquisition was not a hasty decision.
Throughout the past year, Rice visited around 40 facilities and spoke with more than 100 companies before settling on SPNC, which he called a "perfect fit" for PCI's strategic intent in inorganic growth.
"[SPNC] has … strong customer ties, a high level of customer intimacy, and so our focus will initially be just to continue to invest and build on their existing capabilities," he said.
SPNC is an injection molder and contract manufacturer of precision components and assemblies for appliances, consumer products, electronics, industrial, water systems, telecommunications and other markets.
The company is located in Cary, N.C., and operates out of a 55,000-square-foot facility with 37,000 square feet for manufacturing, 14,000 square feet of warehouse space and 4,000 square feet for offices. SPNC's 17 injection molding presses range from 35-1,100 tons. The company has 50 employees.
Tom Falcone, former owner and CEO of SPNC, is retiring. MBS Advisors of Florence, Mass., served as the sell-side adviser for the transaction.
Rice said one of the "attractive prospects" of SPNC was room for grow at the Cary facility. He plans to add at least two more injection molding machines to the site this year. The company also checked off all three categories in terms of geography, technical capabilities, and markets or customers.
"Syracuse obviously gives us a Southern footprint to complement our Germantown, Wis., foundation. Secondly, they add technical capabilities because their press tonnage is higher than ours," Rice said.
"They also specialize in short-lot, high-mix volume processing … and then they open the door to some new markets, new customers, new industries," he added.
PCI runs 67 injection molding machines with clamping forces ranging from 35-500 tons at its two Germantown facilities — 47 presses at its main factory on Morse Drive and 20 fully automated work cells at the Bunsen Drive lights-out plant.
The company employs 82 and is listed at No. 169 on Plastics News' annual ranking of North American injection molders. PCI generated sales of $35 million in 2017. It has been named in PN's Best Places to Work for 2019. It was also named Processor of the Year in 2008.
