Core Molding Technologies, Inc., a North American compounder of custom sheet molding compound and molder of fiberglass reinforced plastics, today announced it has acquired substantially all of the assets of Horizon Plastics International Inc. (HPI), a manufacturer with presence in the state of Nuevo Leon.
Founded in 1972, HPI is a custom low-pressure structural plastic molder, which utilizes both structural foam and structural web process technologies, with approximately 250 employees operating within two manufacturing facilities located in Cobourg, Ontario, Canada and Escobedo, Nuevo Leon, Mexico.
The transaction is an all-cash acquisition for approximately US$ 63 million, which Core will finance utilizing existing cash on hand and a new US$ 85 million senior secured credit facility consisting of a US$ 45 million term loan and a US$ 40 million revolver.
"HPI is a leader in structural foam and structural web molding and continues to innovate around these molding technologies," said Kevin L. Barnett, President and Chief Executive Officer of Core Molding Technologies. “The acquisition brings us existing programs with industry leading customers in several new markets, experienced leadership, a motivated and capable workforce, and expanded geographic reach."
Structural foam and structural web are low-pressure injection molding processes. Because the processes are conducted at low-pressure, parts can be larger, more structurally sound, and have less internal stress than parts made using high-pressure.
HPI's low-pressure injection molding processes use nitrogen gas with melted polymer to reduce the part weight by 20% to 30% or more compared to traditional injection molding processes.
Structural foam and structural web represent niche-manufacturing processes in the injection molding industry with only a limited number of companies focused on these technologies. HPI is well positioned within the industry as all of its business and resources are dedicated to the structural foam and structural web technology.
HPI had annual sales for its fiscal year ended August 31, 2017 of approximately US$ 60 million. The Company expects the transaction to be approximately US$ 0.15 to US$ 0.20 accretive to earnings per share for calendar year 2018. Core plans to continue all HPI operations and does not expect any significant restructuring, shut-down or employee severance costs.