Core Molding acquires HPI

Core Molding Technologies, Inc. (Columbus, OH, US), a North American compounder of custom sheet molding compound and molder of fiberglass-reinforced plastics, announced Jan. 16 it has acquired substantially all of the assets of Horizon Plastics International Inc. (Cobourg, ON, Canada). Founded in 1972, HPI is a custom low-pressure structural plastic molder, utilizing both structural foam and structural web process technologies, with approximately 250 employees operating within two manufacturing facilities, Cobourg and Nuevo Leon, Mexico. The transaction is an all-cash acquisition for approximately $63 million, which Core Molding will finance utilizing existing cash on hand and a new $85 million senior secured credit facility consisting of a $45 million term loan and a $40 million revolver.

“Continuing to expand our technology offerings and diversifying our customer base and end-markets are key elements of our growth strategy,” says Kevin L. Barnett,
president and chief executive officer of Core Molding. “HPI is a leader in structural foam and structural web molding and continues to innovate around these molding technologies. In addition to new technology offerings, 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. We intend to utilize this significant knowledge base and capabilities resident in both facilities to continue to grow the HPI operations.”

“As I looked to transition ownership of HPI, it was important to find the right partner,” says Brian Read, CEO and owner of HPI. “As a long-term Cobourg resident and business owner, future stability of the organization and support of our outstanding technical and production teams was a high priority. I also favored a strategic partner with the scale and technology foundation to continue growing these specialized processes into expanded applications. Core Molding is that partner.”

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 $60 million. Core Molding plans to continue all HPI operations and does not expect any significant restructuring, shut-down or employee severance costs.

“We are excited about adding the structural foam and structural web technologies to our growing portfolio of processes, and to advancing the opportunities the HPI team has under development,” says Barnett. “Additionally, we see opportunities to offer the structural foam and structural web technology to our existing customers and to cross-sell our current processes to HPI’s customers,” he said.