Naples, Fla. — Westfall Technik Inc. has averaged an acquisition every month for more than a year, and the injection molding firm has no plans to slow that pace.
Las Vegas-based Westfall has made 14 deals in 14 months and now operates more than 1 million square feet of manufacturing space at 16 plants.
And as if that wasn't enough, the firm has signed letters of intent for six more deals, Managing Director Rick Shaffer said March 6 at the Plastics News Executive Forum in Naples.
"We look for successful and strategically located companies that we're able to leverage for a better supply chain," he said. "Our end markets are medical, packaging and consumer products. They all want faster time to market and we can invest in those facilities."
In February, Westfall acquired Precision Injection Molding Co. (Pimco) of Corona, Calif. The firm now employs more than 1,300 and operates more than 300 injection molding machines. Its main services include molding, tooling and design, with molding accounting for 75 percent of current sales.
"How do we know if we want to kick the tires [on new acquisitions]?" Shaffer said. "We look for intense collaboration. We're not interested in buying fixer-uppers. And we look at EBITDA and what they did in tough times and the path to increase capacity."
He added that a large part of Westfall's investment thesis is to bring European technology to the U.S. and implement it. The firm also uses levels of design, prototype, tooling and automation as benchmarks.
"Our simple premise is to innovate, automate and integrate," Shaffer said.
He credited investors Lee Equity Partners LLC and BlackBern Partners LLC — New York firms that assisted former Nypro Inc. CEO Brian Jones with launching Westfall in 2017 — with having a patient approach unlike many other private equity firms.
"Our investors are growth investors," Shaffer said. "They invest for the long term. They're not turn and burn guys.
"A lot of private equity focuses on risk, but we focus on potential," he said.
Potential long-term outcomes for Westfall, according to Shaffer, include an initial public offering or a sale to other investors. But he said the most likely outcome at the present time is for existing investors to re-invest.
Westfall also plans to continue operating its many acquisitions under their original names.
"The names have brand equity," he said. "Customers love them because of who they are and what they do. We don't want to compromise on that."