With a bold statement from its new owner, Phillips Plastics Corp. is establishing a major beachhead in the European medical market.
The Wisconsin-based contract manufacturer has entered into a definitive purchase and sale agreement to acquire Medisize Corp. from Ratos AB and other shareholders.
"Medisize has a world-class management team and European footprint, with demonstrated capabilities in high-volume manufacturing and high-speed automation that will strengthen Phillips' service offering and global reach," Matt Jennings, Phillips president and CEO announced. "This is a very positive development for each company's customers, suppliers, and employees."
Willem van den Bruinhorst will continue as president of Medisize, reporting directly to Jennings. The acquisition is subject to regulatory approvals and other customary closing conditions and is expected to be completed by the end of next month.
The move is interesting because all of Phillips's 14 manufacturing plants are located in Wisconsin. Founder and long-time owner Robert Cervenka eschewed overseas expansion, particularly when there was considerable internal pressure to establish a physical manufacturing presence in China.
Cervenka founded the company in 1964 in an old creamery building in a small town in Wisconsin and built it into one of the nation's largest custom molders by focusing on new technology. His business instincts seemed uncanny at times, deemphasizing automotive business and investing heavily to become a full-service supplier to medical device manufacturers. The company became unique among large-scale custom injection molders by becoming agnostic in materials. Parts could be molded in plastic, ceramic, liquid metal, or powder metal.
He sold Phillips on Dec. 10 of last year to Kohlberg & Company LLC, a leading private equity firm based in Mount Kisco, N.Y. Since then, Jennings replaced Brad Wucherpfennig as CEO.
The acquisition of Medisize signals that Kohlberg wants to establish Phillips as a global player in the medical manufacturing market. Europe is a particularly important medical market because of advanced technology there, as well as a regulatory environment that welcomes more innovation than is the case in the United States.
Medisize reported sales of $169 million last year, and should move Phillips close to $500 million in sales this year. Medisize is based in Finland and also operates manufacturing plants in Ireland, the Netherlands, Switzerland, and the Czech Republic. Medisize reported a 14 percent increase in first-quarter profit, according to a public financial report filed by its primary shareholder, Ratos.