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Blackfriars Corporation, the investment group behind Consolidated Electrical Distributors (CED), Emco Corporation, Hajoca Corporation and other distribution businesses in North America and abroad is building out a platform in plastics distribution.
Laird Plastics, at US$210 million in 2003 revenues the largest independent distributor of semi-finished plastic shapes and parts in North America, (second in revenue to GE Plastics), is being sold to an affiliate of Blackfriars Corporation, a privately held U.S. investment group. The president of Blackfriars is Keith Colburn, chairman and CEO of CED, with estimated revenues above $2.5 billion and 550 locations. Purchase price for Laird Plastics is US$65 million, almost ten times the company's 2003 operating profit.
The deal combines Laird Plastics with Port Plastics, Los Angeles, CA, and Amari Plastics, London, England. Laird has about 50 branches in the U.S. and Canada and sells into MRO and OEM accounts in the glazing, sign and graphics markets.
Laird's U.K.-based parent company started the sales process for its U.S. plastics business in May. Combined sales of Laird and Port are estimated at $270 million, giving it a 10 percent share of the U.S. shapes market, according to Mel Ettenson, editor of the industry newsletter Global Plastics Letter. Amari Plastics has estimated annual revenues of US$70 million, making the new combined group the third largest plastic shapes distributor globally, behind Thyssen and GE Polymershapes. Ettenson noted the deal is a departure from recent acquisitions in plastics distribution by metals distributors, such as A.M. Castle and Ryerson Tull.
The operating model for the investment group is highly decentralized, where company management and local managers are provided incentives to grow the business. The focus is developing strong local customer relationships, and the growth patterns point to a successful model. By several accounts, Blackfriar is a hands-off value investor into opportunities it finds in diverse distribution sectors.
It's the biggest deal for Blackfriar since it bought Ontario-based Emco Limited in 2003 for $290 million. Emco Corporation is one of Canada's largest wholesale distributors of products for the construction industry serving three product categories: plumbing & heating and HVAC; waterworks; and energy & resources. Another Emco unit is the largest master distributor of pipe, flanges and fittings in Canada and a major distributor of flanges and fittings in the U.S. Emco Building Products manufactures roofing products.
Hajoca Corporation is the nation's largest privately held wholesale distributor of plumbing, HVAC, PVF, waterworks and pool supplies. The company has locations in 32 states.
Blackfriars also holds positions in other U.S. distribution companies. Up until selling most of its shares in October 2003, Blackfriars owned more than 13 percent of the shares of Industrial Distribution Group, Atlanta, GA, and continues to hold about 18 percent of the outstanding shares of Noland Company, Newport News, VA.