The CEOs of Nolato AB and GW Plastics Inc. say the two companies are an excellent fit, with complementary medical and automotive molding businesses and similar corporate cultures.
"Over the years, GW has been approached by a lot of companies. The one that resonated, even when we were not interested in selling, was Nolato," Brenan Riehl, president and CEO of GW Plastics, said in an Aug. 6 telephone interview.
"The way they treat their workforce, the similarities between our companies and cultures, the way we do business," Riehl said.
Nolato President and CEO Christer Wahlquist summed it up by saying both companies have a culture built on trusting employees.
"When you trust people, great things will happen," Wahlquist said in the same phone interview.
Torekov, Sweden-based injection molder Nolato announced its big move for growth in the U.S. market on Aug. 6, buying Bethel, Vt.-based GW Plastics Inc.
The deal for 2 billion Swedish krona ($224.8 million) will give Nolato Medical Solutions, the company's medical business unit, a stronger position in North America. GW Plastics has both plastics and liquid silicone rubber medical molding operations.
Riehl added that the companies have complementary automotive molding businesses, too. The deal is expected to be completed in September.
Most of GW's operations, a little more than four-fifths, will report to Nolato's medical business unit, with the rest becoming part of its Industrial Solutions operations.
Prior to the acquisition, Nolato had only one U.S. plastics molding plant: Nolato Contour in Baldwin, Wis. It ranked No. 139 for North American injection molders in Plastics News' most recent survey, with estimated sales of $46 million.
GW Plastics was the Plastics News Processor of the Year in 2009. It was No. 53 in the most recent Plastics News ranking of injection molders in North America with six plants in the region, 1,100 employees and $178 million in 2019 sales.
GW also won the 2015 Plastics News Sustained Excellence award, which honors continued growth and achievement and is given to a past Processor of the Year winner.
GW was founded in 1955 by John Galvin and Odin Westgaard, who both had extensive plastics industry experience. They sold to Carborundum Co. in 1973. After a series of deals, GW passed to Standard Oil of Ohio in 1981.
In 1984, a group of managers and investors led by Frederic Riehl — Brenan's father and the current GW chairman — bought the company from Sohio.
Wahlquist called GW a well-managed, well-invested company and said Nolato does not plan to make any changes. He said GW's size and geographic presence will enable significant market synergies over time.
As an example, Riehl said the GW medical business is very strong in the surgical device market, while Nolato is "extraordinarily strong" in diagnostic devices.
"That puts us in a really strong position with our medical customers," Riehl said.
Wahlquist added that GW is "extremely driven" in scientific molding, which is expertise GW can share with Nolato.
The two companies started talking seriously about a deal about 18 months ago, Wahlquist said.
"We've had GW on our radar for many, many years. We've heard about them from our customers, and we were intrigued and interested in them," Wahlquist said. "We've met them at trade shows, and we initiated discussions about one and a half years ago.
"GW has a very strong corporate culture, very similar to the Nolato corporate culture. The way they treat people, the way they mold. And I have a lot of respect for their management," Wahlquist said.
Nolato dates back to 1938 and started medical molding in 1950. Wahlquist headed the company's medical molding unit for 20 years.
Riehl said GW has been able to grow from a single plant in Vermont in 1984 to seven plants on three continents today. GW's factories are in Bethel and Royalton, Vt.; San Antonio, Texas; Tucson, Ariz.; Querétaro, Mexico; Dongguan, China; and Sligo, Ireland.
Nolato has 10 plants in Sweden, six in China, two in Hungary, one in Romania, two in Malaysia, one in Poland, one in Switzerland and one in England. In North America, in addition to the Wisconsin plant, it also has a silicone extrusion plant in Andover, N.J.
Nolato, which is publicly traded, posted 2019 sales of 7.9 billion krona ($909.6 million) and after-tax profit of 703 million krona ($80.9 million).
Riehl said he and existing GW management will stay with the company.
"It's important to us that we have a really solid transition. Especially to our customers, and of course for our workforce," Riehl said. "We both insisted that the organizations stay the same."
Wahlquist said he had an opportunity to visit all the GW sites before travel restrictions brought on by the coronavirus pandemic. The two CEOs laughed when asked if COVID-19 made finalizing the deal difficult.
"It's been a testament to our teams that we were able to do this while having to deal with COVID-19," Riehl said. "We stuck through with it while we kept our workplace safe and our customers secure. It was a lot of hard work."