Commercial Plastics Co. has purchased certain assets of Lenco Inc.- PMC , according to the financial advisor for PMC Group Inc., the parent of Lenco.
Stout Risius Ross of Chicago served as the exclusive financial advisor to PMC Group. Terms of the transaction were not announced.
Commercial Plastics officials did not respond to requests for comment.
Lenco is a molder in Waverly, Neb., specializing in high volume injection molding, assembly and secondary finishing. According to its website, it has a tool room and 60 injection molding machines. It also CD and DVD packaging and a wide range of bar and food service plastic items.
Commercial Plastics is based in Mundelein, Ill. It expanded in November, 2014, with the acquisition of assets from injection molder Xten Industries LLC, in Kenosha, Wis. That operation is now known as Commercial Plastics Kenosha LLC.
Mundelein, Ill.-based Commercial Plastics Co. has purchased the assets of Xten Industries LLC, a Kenosha, Wis.-based custom injection molder.
The deal combines two companies with a similar focus: molders that specialize in large-tonnage machines to make aesthetic parts from engineering resins, according to Bill O’Connor, a co-owner of CPC and the company’s vice president of sales.
Both companies also specialize in using automation and performing secondary operations, he said.
“The core values are the same between Xten and Commercial Plastics. That trickles down to the employees as well. We thought they’d make a good fit,” O’Connor said in a phone interview.
The Xten Industries plant in Kenosha will continue business as normal, but the operation will be known as Commercial Plastics Kenosha LLC. All current Xten Industries workers will stay on, including co-founders Bill Renick and Matthew Davidson.
Terms of the deal were not disclosed. Xten employees were told about the purchase on Nov. 12, and the company announced it on Nov. 14.
Pat LaCross, who is working on integrating the two companies, said Commercial Plastics owners Matthew and Bill O’Connor see this as a good time to expand their custom injection molding business.
“They saw a great opportunity to come in and right the ship and get things back on track in Kenosha,” LaCross said in a telephone interview.
LaCross said Commercial Plastics and Xten were similar-sized companies, both with about 140 employees. Xten has annual sales of about $25 million. O’Connor said the combined companies will have 2014 sales of between $60 million and $65 million.
The deal does not include an Xten plant in Lockport, Ill., which recently closed. O’Connor said the news of the deal was very well received in Kenosha.
“I think [there was] a big cheer,” O’Connor said. “They saw what happened in Lockport and got nervous.”
He declined to comment on Xten’s financial situation. O’Connor said the owners of Xten had been considering a potential sale for some time, and recent events accelerated their timetable.
The purchase was not a surprise. Xten officials had filed a Worker Adjustment and Retraining Notice (WARN) with Wisconsin officials on Oct. 22 saying that they intended to sell the company’s assets to CPC. But at the time they noted that if a deal fell through, Xten might close.
O’Connor said by the time the Xten filed the WARN letter, the deal was nearly finished. In the WARN letter, Xten said CPC was a stalking horse bidder for Xten’s assets. But, in the end, the two companies agreed to a deal, and there was no auction, O’Connor said.
CPC President Matthew O’Connor said in a news release: “We see growth opportunity with the quality partnerships Xten has built over the years and look forward to further developing those relationships.”
Xten Industries began as Hauser PlasTech Inc. in Chicago in the 1940s. The company changed its name to Xten in 2000, and in 2002 it moved into a custom-built 78,000-square-foot factory in Kenosha. The company has 31 presses ranging from 60-1,140 tons of clamping force, and has customers markets including consumer goods, medical waste and food industries.
O’Connor said Commercial Plastics has made five acquisitions in the past 10 years. All were small asset purchases — “one-tenth the size of this, easily absorbed,” he said.
The company didn’t publicize some of the previous acquisitions, and O’Connor noted: “We kind of like to fly under the radar a little bit the last few years.”
But this deal is different, since Xten has a higher profile, and because CPC is keeping the Kenosha plant open.
O’Connor said Kenosha may even see growth in the future. The Xten facility was designed to expand, with room to double the square footage. O’Connor CPC may choose to expand its molding capacity in Mundelein, and add more warehousing in Kenosha.
“We’re looking to grow in either location. I think this purchase gives us that opportunity potentially in the Kenosha area,” he said.
Xten’s Bill Renick called the purchase “a smart play by CPC” in the news release.
“We have worked together for years on various projects and discovered along the way our compatibilities and synergies,” Renick, “I am excited about the future.”
Xten’s Matthew Davidson added: “We are also proud that Commercial recognized the great team we have here. It is encouraging to know that our employees will continue as part of a growing company and as part of the fantastic community of Kenosha.”
Commercial Plastics has 33 presses in its 105,000-square-foot plant in Mundelein, ranging from 65-2,000 tons of clamping force. Its markets include aerospace, lighting, recreational and outdoor consumer products.