The Star Beacon; Ashtabula, Ohio

Local News

January 5, 2011

Premix sale merges it with Hadlock Plastics

CEO predicts strong growth for both companies

North Kingsville’s Premix Inc. and Geneva’s Hadlock Plastics have become sibling companies as a result of Highlander Partners of Dallas and Capstone Capital Partners of Cleveland acquiring Premix at the end of 2010.

Announcement of Premix’s sale was made to employees by Terry Morgan, Hadlock’s president, and Tom Meola, Premix’s chief operating officer, Tuesday afternoon. The companies will retain their unique identities and management teams, but Morgan will lead the combined company as chief executive officer, with Meola in an expanded role as chief operating officer of the new company.

Quantum Composites of Bay City, Mich., a wholly owned subsidiary of Premix, was included in the sale and will retain its identity and product focus, as well.

Morgan and Meola, who met with the Star Beacon on Tuesday morning, said the merger is a positive move for Ashtabula County because both companies are well positioned for growth as the national economy emerges from recession.

“This is positive economic news for the whole area,” Morgan said.

The men said there is a global drive to replace traditional manufacturing materials like wood and metal with composites that possess high strength-to-weight ratios while offering corrosion resistance and strength. Potential growth industries for the use of composites include alternative energy; transportation; aerospace; defense; construction; electrical, medical and industrial industries; and heating, ventilation and air conditioning.

“Our complementary skills, technologies and manufacturing processes will broaden and deepen our capabilities so that we are better prepared to meet global demands,” Morgan said in a prepared statement.

Premix is a global leader in the development, design and manufacture of thermoset composite materials and custom-molded components. Hadlock Plastics is a custom-molder of high-quality engineered composite products.

Meola said Premix and Hadlock each carved niches in the market and did not compete directly. Hadlock was a customer of Premix and Quantum, which serves a specialized niche market.

“We’ve always held each other in high regard,” Meola said.

Morgan and Meola said the new company will be vertically integrated to provide customers with everything from prototyping and the raw materials to engineering and finished products.

“The new company brings together seasoned engineering teams, experienced dedicated employees, and a highly motivated sales force who will continue to serve their customers in diverse industries,” Meola said in a statement.

Premix has 300 employees and Hadlock 130. Facilities, including Quantum’s, will not be merged, and expansions under way at them will continue. More than 500,000 square feet of manufacturing capacity exists among the three locations.

Highlander Partners takes a “buy and build” approach to its holdings, and that philosophy is already at work in its Ashtabula County holdings.

Meola and Morgan said both Premix and Hadlock are expanding and have been adding employees and equipment to their plants. Hadlock is also expanding its building.

“The profits we generate go right back into the facilities here,” Meola said.

The men said both companies emerged from the recession in very good financial condition and have new products ready to introduce into the marketplace. They said consolidation of staff and resources should not occur as a result of the merger. Job opportunities at the two county plants include operators and finishers.

“We’re looking for typical good skilled (laborers) who have a good work ethic and the ability to learn,” Meola said.

Both companies started out as local family-owned enterprises. Premix was founded in 1959 by Ford Davey and the late George Kaull. Hadlock Plastics was started by Glenn and Dick Hadlock in 1968, in a Harpersfield Township garage. Premix was sold 11 years ago to Mason Wells, a Milwaukee private equity firm. Capstone and Highlander acquired Hadlock from the family in 2008.

Meola said Mason Wells held Premix longer than is typical for a private equity firm. The firm began to seek a buyer at the beginning of 2010.

In addition to the Hadlock/ Premix investment, Highlander Partners has invested more than $300 million in paperboard products, medical manufacturing, medical staffing and hospital management companies.

Meola and Morgan said the sale was conducted without the benefit of any local or state tax incentives, and without assistance from county economic development organizations.

Joseph Moroski, president of the Ashtabula County Board of Commissioners and a former Premix employee, said the sale is “good news.”

“Both Premix and Hadlock Plastics are quality organizations and have a lot of good employees,” Moroski said.

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