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Schweitzer-Mauduit International buys TPU film and sheet maker Argotec

Thursday, Sep 24, 2015

Schweitzer-Mauduit International Inc. has signed a deal to buy Argotec LLC, a producer of thermoplastic polyurethane film and sheet, for $280 million.

Schweitzer-Mauduit, which goes by the initials SWM, is a publicly traded company based in Alpharetta, Ga., whose plastics holdings already include DelStar Inc., a specialist in thermoplastics filtration.

SWM specializes in the paper products for the tobacco industry, but its 2013 acquisition of Middletown, Del.-based DelStar helped it diversify into new markets. Now the pending purchase of Argotec will further expand its portfolio and markets.

“Much like DelStar, Argotec is a technology and quality leader in resin-based rolled goods with a strong competitive position,” said SWM Chairman and CEO Frederic Villoutreix, in a news release. “Argotec films, which are complementary to our current extruded resin production capabilities, generate strong margins and are used in a diverse set of attractive niche market segments, such as paint protection, glass lamination, medical and graphics.”

SWM is buying Argotec from Chicago-based private equity firm Wind Point Partners, which bought the company from its founders, Richard Barnes and Steven Wolkenbreit, in 2013.

According to SWM, Argotec generates annual sales of about $115 million, has an earnings before interest, taxes, depreciation and amortization (EBITDA) margin nearing 20 percent, and annual growth projected in the 5-7 percent range.

Argotec is based in Greenfield, Mass. The company made a major acquisition of its own last year, when it bought Stevens Urethane of Easthampton, Mass. Stevens makes TPU film and sheet, as well as urethane tubing, cord and profiles.

SWM said it expects the deal to close in the fourth quarter. Argotec will be included in the company’s Filtration segment, which also includes DelStar, and will be renamed Advanced Materials and Structures.

With Argotec, the AMS unit will have annual sales approaching $300 million, according to SWM.

SWM was originally the tobacco-related and specialty paper business of Kimberly-Clark Corp., and it was spun off as an independent company in 1995. Tobacco-related products accounted for 76 percent of its net sales in 2014, down from 94 percent in 2013.

Following the December 2013 purchase of DelStar, SWM added two related acquisition in 2014 — certain assets from Pronamic Industries Inc. and Smith & Nephew's Advanced Wound Management division.

In a Sept. 23 conference call with analysts, Villoutreix said SWM will look for additional acquisitions for its growing AMS unit.

SWM employs about 3,000 people worldwide, with operations in the United States, United Kingdom, France, Russia, Spain, Luxembourg, Brazil, Canada, Poland and China, including two joint ventures.

 

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