Sweden’s Nolato Group announced today the acquisition of GW Plastics in a deal totaling approximately 2 billion SEK ($230 million). Headquartered in Bethel, VT, with seven production facilities in the United States, Mexico, China, and Ireland, GW Plastics is primarily focused on serving medical device OEMs. As such, the acquisition strengthens Nolato’s Medical Solutions business, notably expanding its North American footprint.
At a press conference held earlier today, Nolato CEO Christer Wahlquist said it had been keeping an eye on GW Plastics for “some time.” GW Plastics has posted consistent 10% growth over the past 10 years and reports annual net sales of approximately SEK 1.8 billion ($207 million). A little over four-fifths of its business involves medical devices, with the remainder largely focused on automotive applications.
Nolato's North American footprint before (left) and after the GW Plastics acquisition. The black dots in the graphic
on the right represent GW Plastics' facilities. Image courtesy Nolato.
Founded in 1955 and under the same ownership since 1983, GW is “very much like a family-controlled company with a long-term strategy for growth,” said Wahlquist, making it a good cultural fit with Nolato. Moreover, it has established a position as an industry leader specializing in complex injection-molded thermoplastic and silicone solutions with a significant degree of innovation and a high-tech standardized global manufacturing platform, said Nolato in a press release announcing the deal. “This acquisition provides us with significant volumes and a strong position on the key North American continent. It supports relationships with existing customers, while also creating additional opportunities for growth and expanding our customer base,” said Wahlquist.
Approximately SEK 1.8 billion of the SEK 2 billion acquisition price is to be paid upon transfer of ownership. Just over four-fifths of GW Plastics' business will be reported under Nolato’s Medical Solutions business area, with the remainder reported under Industrial Solutions. Current management will remain with the business, said Nolato.
Last month, Nolato reported strong Q2 sales growth and earnings performance across its three business areas — Medical Solutions, Integrated Solutions, and Industrial Solutions, resulting in the best quarter ever in the company’s history, said Wahlquist. Medical Solutions sales notably increased 9%. "Production in some segments such as laboratory products and respiratory aids saw increased demand owing to the coronavirus situation. However, products in areas such as surgery were negatively affected as a result of fewer operations taking place,” said Wahlquist, as reported by Bloomberg following the earnings report.
Pending regulatory approvals in the United States, the acquisition of GW Plastics is expected to be completed in September, when the business will be consolidated into the Nolato Group. The transaction is funded through Nolato’s own cash funds and new credit agreements, said the company.