A. Schulman Announces Acquisition of ECM Plastics, Inc.
A. Schulman, Inc. announced that it has signed a definitive agreement to acquire ECM plastics, Inc., a privately owned, leading plastics compounder located in Worcester, Massachusetts, for $36.5 million. ECM Plastics, Inc. generates approximately $40 million in annual sales. After expected synergies, operating margins are projected to exceed 10%, with operating profit per pound to surpass 15 cents. The transaction is expected to close in early September pending the completion of closing requirements.
"With ECM's expertise in custom color matching, higher-value compounding and specialty additive formulations, we believe they are an excellent strategic fit as we continue to focus on niche products. We expect ECM to provide strong synergies when combined with our current masterbatch and engineered plastics businesses allowing us to strengthen our position for long-term profitable growth in the United States," said Joseph M. Gingo, Chairman, President and Chief Executive Officer.
"As we have undertaken this shift to higher-value products in engineered plastics, specialized color and masterbatch, we have exited our legacy plants that were dedicated primarily to serving the volume automotive market," Gingo continued. "In addition to the ECM acquisition, we have announced the sale of our Bellevue facility, which marks the completion of this transformation. We are pleased to have found a strong buyer in Mitsubishi Chemical Performance Polymers."
Gustavo Perez, General Manager and Chief Operating Officer of the Americas for A. Schulman, stated, "The acquisition of ECM will expand our capabilities in a number of markets, especially personal care and cosmetics, where ECM has a strong presence. In addition, ECM has a robust technical organization focused on product development that will enhance our ability to introduce new and innovative products to the marketplace."
The Company also announced the sale of its vinyl chloride compounding facility in Bellevue, Ohio, to Mitsubishi Chemical Performance Polymers, Inc. ("MCPP"), a wholly owned subsidiary of Mitsubishi Chemical Corporation. Terms of the sale were not disclosed; however, A. Schulman will not incur any significant gain or loss on the sale. The sale will allow A. Schulman to continue its U.S. focus on higher-value technical products in keeping with its global strategy, while MCPP will expand its presence in North America's vinyl chloride compounding market.
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