The price: $62.5 million in cash, according to a filing that Myers made on Tuesday, Nov. 10, with the U.S. Securities and Exchange Commission.
Myers, a manufacturer of polymer products for industrial, agricultural, automotive, commercial and consumer markets, said in a news release that Elkhart will operate as a new strategic business unit within Myers’ Material Handling Segment.
Elkhart has six U.S. manufacturing facilities and employs about 460 people, Myers said. (The Akron company has about 1,850 employees.) In 2019, Elkhart posted revenues of about $100 million, and its adjusted EBITDA margin was about 9%.
Myers, which financed the transaction with cash on hand, said in the release that the acquisition is expected to be immediately accretive to earnings.
The deal also is “expected to generate annual cost synergies of approximately $4 million to $6 million per year, most of which are projected to be achieved in the first two years,” Myers said. Those cost reductions “will stem primarily from operational excellence initiatives and supply chain optimization. In addition, the company expects to realize growth synergies due to the broader geographic footprint created by the combined businesses.”
Myers said the combination of Elkhart with Myers’ Ameri-Kart business will create the country’s fifth-largest rotational molding business. That combined business “will provide customers with access to a more complete portfolio of diverse products supported by increased supply-chain efficiencies,” Myers said in the release.
Elkhart, founded in 1988, makes engineered products for the recreational vehicle, marine, agriculture, construction, truck and other industries.
Mike McGaugh, president and CEO of Myers, said in a statement that the acquisition is part of Myers’ new, long-term strategic plan that is “focused on strengthening the company through organic growth initiatives, commercial and operational excellence, pursuing bolt-on acquisitions in plastics molding, and driving a high-performing culture. As a bolt-on acquisition within our existing technology space, Elkhart fits perfectly into this plan and helps us take a meaningful step toward our long-term vision.”