Onex buys Davis-Standard

Extrusion systems supplier Davis-Standard LLC (Pawcatuck, CT) was sold by private equity firm Hamilton Robinson and Davis-Standard management shareholders to ONCAP, the mid-market private equity platform of Toronto-based investment firm Onex. The deal, which closed on Dec. 23, 2011, was announced to the market on Jan. 4, 2012 and ends Hamilton Robinson's involvement with Davis-Standard.

That involvement goes back to its 2003 acquisition of Black Clawson Converting Machinery, which later merged with Davis-Standard in 2005, leaving the combined company with two primary units: converting: including the Egan and Black Clawson brands, and extrusion systems, led by D-S.

James Murphy, president of extrusion systems at Davis-Standard, told PlasticsToday that the sale by Hamilton Robinson was expected, fulfilling a normal investment cycle. "It's normal for [a private equity firm] to look to exit at some time," Murphy said.

Under the new ownership structure, Davis-Standard management will carry over and remain "significant shareholders in the business", according to a release. The exact financial terms of the deal were not disclosed. Current CEO Charlie Buckley will become company chairman, with Robert Preston joining the company as its new CEO. Preston's background includes stints in the U.S. and abroad at Eastman, Allied Signal and Johnson Electric.

Buckley, with backing from Hamilton Robinson, led a management buyout of Davis-Standard from its then majority shareholder, Chemtura, in 2006.

Preston will be based at company headquarters in Pawcatuck, and Murphy said his appointment and the transition of Buckley to chairman were the only changes to management resulting from the deal.

Murphy praised Hamilton Robinson's tenure over Davis-Standard, noting the growth in business and reach Davis-Standard experienced. "Management was able to grow the business's top line significantly, but as important, or more importantly, we were able to expand the business overseas," Murphy said, noting that sales outside North American now account for anywhere from 50% to 60% or more of all sales.

D-S has one major manufacturing facility outside North America located in Düsseldorf, Germany, and under Hamilton Robinson it added sales and service team in Asia, helping it greatly expand sales in that region. It also hired representatives in Latin America, with particularly strong growth in Brazil over the last five years, according to Murphy.

Under ONCAP, Davis-Standard will look to continue to grow market reach and revenue through acquisitions and expansion, with Murphy noting that "all avenues will be considered."

"The goal is to grow our global capabilities and the ability to serve global customers," Murphy said.

Murphy said the company enters 2012 with a record backlog, after record orders for the fiscal year that ended Sept. 30, 2011. Murphy said the packaging market, which is Davis-Standard's largest, was "resilient" through the recession and that sector, as well as emerging markets, are showing strong growth potential going forward.  

Davis-Standard designs and manufactures extrusion systems, feedscrews, barrels and process controls for the flexible web converting, plastics processing and rubber industries. The company manufactures extruders and extrusion processing equipment for blown and cast film, blowmolding, compounding/pelletizing, extrusion coating/laminating, pipe/profile/tubing extrusion and more.