Bedford Heights, Ohio — Plastics Machinery Group is seeing an uptick in machinery demand and doing more work in mergers and acquisitions.
"In the first six months of the year, companies were waiting for a recession," President and CEO Donald Kruschke said in a recent interview at the firm's headquarters in Bedford Heights. "Now they're getting orders and scrambling for equipment."
PMG typically has about 40 pieces of used equipment in stock, but Kruschke said the firm currently has fewer than 10. PMG sells used thermoforming, blow molding, extrusion and recycling machinery, as well as new blow molding equipment for Meccanoplastica srl and thermoforming machines for Amut Group.
In the M&A market, PMG's Business Services unit recently brokered a deal in which Global Packaging Development Inc. bought Integrated Thermoforming Systems Inc., a thermoformer based in Aurora, Ill. ITS operates five thermoforming lines and employs 14. The firm has annual sales of about $2.5 million.
GPD of Apex, N.C., is a design firm that previously had outsourced its production work.
PMG did its first official deal as an M&A consultant in late 2022, when Duramax Holdings LLC of Charlotte, N.C., acquired thermoformer Forming Technologies LLC of Muskegon, Mich. PMG had informally served as a consultant on around 10 deals since 1994. The firm hired financial veteran Darrin Kert late last year to make M&A work an official part of its business.
"M&A has really exploded in the last couple of years," Kert said. "There's been a lot of interest from family offices and private equity companies.
"A lot of small plastics companies don't have an exit strategy or a succession plan," he added. "There's a lot of interest in companies at that level."
PMG employs 35 in Bedford Heights and is looking to add six to 10 more employees in both sales and production. The firm occupies an 80,000-square-foot building and 20,000 square feet in an adjacent building. When PMG acquires a piece of used machinery, it typically does six months of refurbishing work before reselling it.
PMG acquired the larger building in 2016 when it bought Loveman Steel & Fabrication. PMG continues to operate that business at the site, although Kruschke said it's a relatively small part of the firm's overall business.
Kruschke said that in the next 18 months, PMG will decide if it wants to expand in Bedford Heights or move to a larger site elsewhere in Northeast Ohio. The firm also is making "a major push" into England, where its sales office is run by industry veteran Ken Braney. PMG plans to increase the size of its sales staff there.
With increased interest in sustainability, recycling equipment "has been at the forefront of our strong demand," Kruschke said. He added that he "feels good going forward" for PMG in the second half of 2023.