A. Schulman, Inc. (Akron, OH) has ascquired the Perrite Group, a thermoplastics compounder with operations in Malaysia, the United Kingdom and France, for approximately $52 million. Perrite was part of the Vita Group portfolio of companies.
The acquisition is expected to increase revenues in A. Schulman's Asia Pacific segment by 35% and will double the size of the company's existing engineered plastics business in the region. It is expected to deliver approximately $2 million to $3 million in annual synergies, including initial savings in procurement followed by more significant savings in the area of operational efficiencies.
Perrite originally established a presence in Malaysia to serve the thermoplastic compound needs of the local production site of Dyson Ltd., an innovative manufacturer of vacuum cleaners, The Malaysian site, in the state of Johor, subsequently expanded into other markets such as automotive but Dyson remain to its key account.
"Expansion of our Custom Performance Colors and Engineered Plastics businesses in APAC is a key component of our growth strategy, and the addition of Perrite's manufacturing facility in Malaysia will enhance our ability to serve key customers in the region as well as globally," said Joseph M. Gingo, Chairman, President and Chief Executive Officer, A. Schulman. "It also provides an attractive opportunity to leverage our broader portfolio of products through our successful color and niche engineered plastics businesses in EMEA and the Americas."
Gingo continued, "Perrite holds leading positions in attractive target markets such as electronics, appliance and niche automotive; offers well-established and respected brands; brings a highly experienced technical team; and has a strong track record of profitable growth. The acquisition will allow us to strengthen our European niche Engineered Plastics business with the addition of new customers, as well as move into adjacent markets with Perrite's highly profitable insulation materials for the sub-sea flexible oil pipe market, which are manufactured in the United Kingdom."
Perrite has manufactured and distributed thermoplastic compounds for the electrical, automotive and industrial markets for more than 35 years, offering a broad portfolio of standard and custom compounded polymer products. Perrite's product lines include the high-performance Ronfalin ABS brand and prime-quality polyamide Vitamide range. Other key brands include Percom polypropylene, Perlex polycarbonate, Styralin polystyrene and Pertal POM. The company employs approximately 220 people and recorded revenues of $140 million in fiscal 2012.
Gingo added, "A. Schulman's strong balance sheet and solid cash flow generation continue to position the Company well to pursue its acquisition strategy. Our goal is to further strengthen our Company's leading position in our core markets and position the Company for sustainable growth. We will remain aggressive in pursuing this strategy and are encouraged by the opportunities in the global acquisition pipeline."