Many analysts are predicting a blockbuster year for merger and acquisition activity in the plastics industry. Tax reform, a monumental amount of cash on hand among the big players and a solid economic outlook, not just domestically but globally, are creating a perfect storm for transactions. Add to that already heady mix projected 4.8% growth of healthcare revenues in 2018, according to Frost & Sullivan, and you have some context for a deal that was finalized yesterday: The acquisition of Spectrum Plastics Group (Alpharetta, GA) by affiliates of AEA Investors (New York City). The global private equity firm acquired Spectrum Plastics from Kohlberg & Company LLC (Mount Kisco, KY). Financial terms of the acquisition were not disclosed.

A medical extruder with complementary injection molding, silicone and assembly capabilities, Spectrum Plastics was formed via the 2017 merger of Pexco LLC and PPC Industries (including its Kelpac Medical subsidiary). Pexco and PPC serve the industrial profile extrusion and industrial film markets, respectively. Spectrum Plastics operates more than 15 plants across five countries and three continents, comprising approximately 2,000 employees.

AEA Investors, founded in 1968 by the Rockefeller, Mellon and Harriman family interests and S.G. Warburg & Co. as a private investment vehicle, is one of the pioneers in the private equity industry, said the company in a press release. AEA manages funds that have approximately $10 billion of invested and committed capital.

"AEA Investors is a global investor with a strong track record of supporting companies such as Spectrum Plastics Group and taking them to the next level,” commented Neil Shillingford, Spectrum Plastics CEO, in a prepared statement. “We are elated to be a part of this team while we evolve our business in specialty and medical plastic manufacturing on behalf of our customers and employees.”

In September 2017, PlasticsToday interviewed Tom Flannery, Business Development Director, Injection Molding & Assembly, at Spectrum Plastics. He offers insights on the opportunities and challenges that the company faces as a supplier to the medical device industry in the article, “Molder Spotlight: How Spectrum Plastics lives up to its name.”