Jabil Circuit Inc. (JBL), a contract manufacturer best known for its work in the electronics field, is making a major move in plastics and the medical field with the acquisition of Nypro Inc. for $665 million.
Jabil (St. Petersburg, FL) announced the deal this morning. It is expected to be completed by the end of May. Revenues at Nypro, whose growth mushroomed under the leadership of Gordon Lankton, exceed $1 billion annually, Jabil said.
"This will be a welcome complement to Jabil's engineering and supply chain solutions for health-care hardware and advances our ambition to become a leading provider to the global health-care marketplace," Courtney Ryan, senior vice president of global business units at Jabil, said in the statement.
Nypro was founded in 1955 in Clinton, MA and now operates in 10 countries. It was a leader in introducing precision injection molding to China, and has been on the leading edge of new technology in the United States, ranging from use of additive manufacturing for tool inserts to "humanoid" robots. Lankton, who is still chairman of Nypro and a member of the Manufacturing Hall of Fame and the Plastics Hall of Fame, took an ownership interest when joining the company in 1962. He acquired complete ownership in 1968.
In 1998, Lankton sold most of his stock to an Employee Stock Ownership Plan (ESOP) which now owns a substantial portion of Nypro's stock along with employee-owners. "I have always believed in growing our business in order to create meaningful opportunities for our employees. Our partnership with Jabil does just that, and I am confident they are an ideal partner for Nypro," said Lankton.
Completion of the deal is contingent upon approval of its owner-employees, Nypro shareholders, regulatory antitrust clearances in the U.S., China and other jurisdictions and certain other customary closing conditions. The deal is tantamount to winning the lottery for hundreds of employees of Nypro, many of them in Clinton, a small, former mill town located northwest of Boston.
Older employees likely will view the potential income as a godsend, while younger employees may prefer to continue working under the progressive and somewhat benevolent approach of Lankton, a fatherly figure much liked in the company and the industry.
In an example of Lankton's generosity, he has invested much of his personal wealth in a museum of Russian religious icons which he has placed in Clinton, on a slight hill just above the company's flagship factory in a renovated carpet mill. The museum, which houses the largest collection of icons outside of Russia, would have been welcomed in Boston, New York, or almost anywhere else, but he wanted to create a reason for people to come to Clinton.
Following are quotes on the deal from today's announcement:
"The combination with Nypro will extend Jabil's materials manufacturing capabilities into the healthcare and consumer packaging markets as well as add depth to our consumer electronics business," said Timothy L. Main, Chairman and CEO of Jabil. "We think this is an important strategic step in Jabil's development of engineering and capability intensive businesses. Combining Nypro's