Davis-Standard LLC's purchase of Deacro Industries Ltd., a manufacturer of slitting, rewinding and roll handling equipment based in Mississauga, Ontario, is business as usual for the company.
In the past few years, Davis-Standard has been bulking up its capabilities with interrelated acquisitions and building on a reputation as a global plastics machinery powerhouse for extrusion and converting.
"We've been really focused on complementary technology and things we can do to broaden our offerings," Jim Murphy, president and CEO of Pawcatuck, Conn.-based Davis-Standard, said in a Dec. 19 phone interview with Plastics News.
The company's acquisition of Deacro follows that same theme, Murphy explained.
"[Deacro] is well-positioned in the area where they participate, which is slitting and rewinding equipment," Murphy said, adding that it is an important process in flexible packaging especially.
"Flexible packaging is a market where we have a lot of involvement with our cast film, extrusion coating, liquid coating and blown film product lines. So, it really was an opportunity to extend our capabilities and our technology that we can offer to our customers and to the market more broadly," he said.
Davis-Standard officially announced the deal Dec. 16. Financial terms were not disclosed.
Deacro was owned by Spell Capital Partners LLC, a Minneapolis-based private equity firm with numerous plastics businesses. Spell had owned Deacro since October 2016. David Evatz of Chicago-based investment banking firm Stout advised Spell on the sale.
Murphy said there are no plans for any changes to the current management team at this time, and Deacro President Clarence Beishuizen will still be responsible for the business operations going forward.
Beishuizen said the two equipment manufacturers share business values and longstanding reputations in the industry.
"With Davis-Standard, we have a partner that is committed to our customers, employees and advancing technology," Beishuizen said in a statement. "Deacro will continue to operate and serve its customers as before, and we are enthusiastic about our opportunities with Davis-Standard."
Deacro was established in 1979 and started out as a machine shop for the plastics industry, according to its website. Today, the company makes turret machines, rewinders, cantilevered slitters and core cutters for the converting industry. It operates out of a 75,000-square-foot facility in Mississauga, near Toronto, where it employs more than 100 people.
Less than 5 miles north, in the neighboring city of Brampton, is Brampton Engineering — a manufacturer of multilayer blown film equipment, including the trademarked AeroFrost air blown and AquaFrost water quenched film systems — that Davis-Standard acquired in 2018.
Brampton Engineering has a number of customers in flexible packaging, Murphy said.
"The industry is still relatively fragmented and if we can offer additional technology and products to our customers, and we think it makes sense, [then] we're always interested in pursuing those opportunities," he said of the strategy.
Prior to the Deacro deal, Davis-Standard's most recent acquisition was in November 2018 when it bought Thermoforming Systems LLC, a thermoforming equipment maker based in Union Gap, Wash.
"We're 100 percent in extrusion and extrusion-related products, meaning thermoforming is a process after extrusion, the slitting and rewinding equipment is a process that comes after extrusion," Murphy said. "So, we're really focused on the customer segments in the markets where we currently participate and what we can do to broaden our technology and product offerings."