Thermoforming company FormTex Plastics Corp. is being sold to a Canadian company, Good Natured Products Inc., for $4.8 million.
FormTex, based in Houston, adds $4.9 million in annual sales as well as approximately $600,000 in earnings before interest, taxes, depreciation and amortization for the 2021 calendar year. Revenue for the 12 months ending Feb. 28 was $5.1 million.
Acquiring the company will result in $200,000 to $300,000 in cost savings in the first year after closing, Vancouver-based Good Natured said. The deal is scheduled to close May 31.
FormTex makes packaging for the medical, food, electronic, industrial and retail markets. The company operates seven thermoforming machines in 51,000 square feet of leased space on a 1.9-acre parcel, Good Natured said.
The company currently is only using 40 percent of its manufacturing capacity, so Good Natured sees "significant potential" to increase throughput on current machinery as well as add more thermoforming machines in existing space.
"We believe FormTex represents a very attractive acquisition for Good Natured building on the strong foundation in our packaging business and expanding our geographic reach to highly strategic and synergistic markets," Good Natured CEO Paul Antoniadis said in a statement.
"We expect to access cost synergies by directing internally produced extruded rollstock sheet for use in FormTex's operations, expanded capacity to handle the company's growth trajectory, and through logistic and operational efficiencies," Antoniadis said.
The combined company plans to supply extruded roll stock sheet from its Ex-Tech facility to FormTex, a move that "is expected to result in material positive financial synergies," said Good Natured.
Good Natured acquired Ex-Tech, of Richmond, Ill., in May 2021 for $14.1 million. Ex-Tech makes plastic sheet and film products, including extruded rollstock for thermoformed packaging. At the time of that purchase, Good Natured said Ex-Tech operated seven extrusion lines in a 75,000-square-foot facility.
Good Natured will use a term loan of up to $1.8 million as well as $3 million in chase from an $8 million stock offering.
Good Natured also acquired Shepherd Thermoforming and Packaging of Brampton, Ontario, in early 2021. That move added six thermoforming machines in 42,000 square feet of space.
The new owners of FormTex said they "will be able to leverage Houston-based manufacturing, importing, warehousing and logistics to serve the southeastern U.S. market."
Shepherd Thermoforming and Packaging is No. 141 on the most recent Plastics News list of North American thermoformers with estimated annual sales of $6.5 million. FormTex is tied at No. 144 on the same list.
Solegear Bioplastic Technologies Inc. changed it name to Good Natured in 2017.