K-Tron to acquire Chinese auxiliaries firm

K-Tron International Inc. (Pitman, NJ) signed a definitive agreement to acquire certain assets of Wuxi Chenghao Machinery Co., a privately held feeder and ancillary equipment manufacturer founded in 2002 and serving compounders and injection molders in China. The total cost of the transaction over a five-year period, including the purchase price and payments under related employment and other arrangements with Wuxi Chenghao’s current owner, could be as much as $3.5 million. The acquisition is expected to close early in 2007 and is subject to various closing conditions, including certain required Chinese governmental approvals.

The acquisition comes on the heels of K-Tron’s acquisition of of privately-held Premier Pneumatics Inc. (Salinas, Kansas), a manufacturer of pneumatic conveying systems and bulk handling equipment for the North American market (see e-weekly for Oct.16-20).

Wuxi Chenghao, with about 60employees, is located in Luoshe Key Open Industrial Park, approximately 60 miles west of Shanghai. The company makes volumetric and gravimetric single- and twin-screw feeders and controls, vibratory trays, pelletizers, and pneumatic screen changers for use in plastics compounding and injection molding processes. K-Tron expects to obtain approval to form a Wholly-Foreign Owned Entity (WFOE) that will purchase certain assets from Wuxi Chenghao and serve as the entity to conduct the business following the closing.

Wuxi Chenghao’s management is expected to join the WFOE following the completion of the transaction, including the current owner and general manager, Wang Hongliang. Commenting on the acquisition, K-Tron Chairman and CEO Edward B. Cloues II said, “The acquisition of Wuxi Chenghao will be a major step forward in K-Tron’s strategic plan to expand our global leadership position in feeding and pneumatic conveying equipment for difficult-to-handle materials. K-Tron has served the upper-tier PRC market for many years by selling this equipment primarily to multinational end users through resellers in Europe and the United States, through independent representatives in the PRC, and by providing support through our Representative Office in Shanghai, which we established in 1996. The domestic PRC market for plastics processing equipment is growing at double-digit rates, and this acquisition will enable us to address the domestic customer base with products designed and manufactured in the PRC and sold in local currency.”—[email protected]