Clearwater Beach, Fla. — The growing influence of private equity investments in plastics has been a good thing for Aptyx and Enviroplas Inc.
Both firms have been acquired by private equity companies in the last two years. Enviroplas was advised in its deal by PMCF, an investment banking firm headquartered in Chicago. PMCF is an affiliate company of financial firm Plante Moran, which works with Aptyx.
"Private equity has invested heavily in the plastics industry. It touches all sectors," PMCF Managing Director John Hart said March 12 at the Plasti cs News Executive Forum in Clearwater Beach, Fla.
Hart added that the number of PE deals in the plastics and packaging market is increasing, with PE's percentage of deals in that market increasing as well. PE deals now make up almost half of all plastics and packaging deals.
"The landscape has changed," Hart said. "Private equity firms are being more aggressive with growth and capital."
Aptyx was known as Molded Devices Inc. when it was acquired by PE firm TruArc Partners LP of New York in 2022. MDI, a Tempe, Ariz.-based medical device maker, changed its name to Aptyx in late 2023.
"We wanted a partner to be able to grow as a contract manufacturer," Aptyx CEO Gregg Tobin said March 12 at the event. "We needed flexible capital and partners. Now we've got a great relationship. It's been an extremely positive experience for us."
Enviroplas, an engineering resins compounder in Evansville, Ind., was acquired in late 2022 by Aurora Plastics LLC, a Streetsboro, Ohio-based compounder that's owned by PE firm Nautic Partners of Providence, R.I.
Working with Aurora "has been excellent for us," Enviroplas CEO Jim Stratman said. "We let our employees know [the sale] was a positive thing that we were doing to grow the company."
"We weren't in a hurry to sell," he added. "We were almost debt free, but having a private equity sponsor has been a godsend for us so far because we wanted to grow."
Aptyx has been able to use M&A as a strategic tool, Tobin said. Shortly after being acquired, Aptyx bought two German medical tubing companies — GlobalMed Inc. and Schauenburg-Truplast.
Aurora followed its deal for Enviroplas by acquiring EnCom Polymers Inc. earlier this year. Like Enviroplas, EnCom is an engineering resins compounder based in Evansville. Aurora now has made six acquisitions in the last seven years. EnCom will be grouped with Enviroplas in Aurora's engineered thermoplastics unit.
Engaging with private equity does take work. "Our level of operational reporting has increased and improved," Tobin said. "We've also made changes to our functional groups."
Stratman said he "had always heard rumors about private equity — that they'd tell you this, then do that — but that hasn't been the case with us." He added that Nautica "has been hands off. … They have questions, but they love the way we run our business. … They're part of the solution, not part of the problem."
At Aptyx, the firm's customers "want a supplier who can grow with them around the world, and that takes dollars," Tobin said. "Our customers need strong suppliers to help them grow."
Stratman added that Nautica understands the product cycle at Enviroplas. "In engineering plastics, it could take three to five years to get a medical approval," he said. It's not about a week's or a month's or a quarter's numbers."