Georgia-based private equity firm buys Argotec for $280 million

Last modified: Thursday, October 08, 2015

Argotec LLC, the Greenfield-based plastic film manufacturer whose rapid growth resulted in its sale to a Chicago-based private equity firm two years ago, is being purchased again, this time by a Georgia-based “provider of highly engineered solutions and advanced materials,” including specialty papers, for a variety of industries.

Argotec, a global leader in the production of thermoplastic polyurethane film and sheet, Monday signed an agreement to be acquired by SWM of Alpharetta, Georgia.

The $280-million transaction — including a $215-million purchase price and $65 million in tax benefits — expected to be completed before the end of this year, according to information provided by SWM, which has about 3,000 employees worldwide, with operations in six European countries, Brazil, Canada and China as well as the United States.

Argotec, founded in 1988 by Richard Barnes and Steven Wolkenbreit, with three buildings at the Greenfield Industrial Park, was purchased in 2013 by Wind Point Partners, recognizing its tripling of growth in the previous five years and potential for similar growth. The buyers saw an increased market for plastic protection for automobiles and electronic device screens.

A leading manufacturer of thermoplastic polyurethane films, a highly engineered material with value-added properties such as durability, UV protection, heat resistance and optical clarity, Argotec has focused on high-value niche applications including vehicle paint protection, glass lamination for superior strength, medical devices and wound care, textile lamination, graphic printing and over-lamination.

Steven Dorst, chief financial officer for Argotec, declined Thursday to give an indication of how many people it employs. The Recorder reported in May that there were 150 workers in Greenfield, in addition to 80 employees at the Easthampton plant it acquired in May 2014 as part of its purchase of Stevens Urethane.

The company was approved earlier this year for the state’s Economic Development Incentive Program Investment Tax Credits.

It also sought a tax break from the town, but did not receive it, according to the Greenfield assessor’s office, because it decided to rent a fourth industrial park building rather than building with a promise to add 50 new jobs over the next five years.

Neither Dorst nor SWM spokeswoman Linde Miscio would comment Thursday on whether Argotec’s jobs would remain in Greenfield because the transaction is still pending.

Frederic Villoutreix, SWM’s board chairman and chief executive officer of SWM, called Argotec “a highly attractive asset and its core competencies and attributes align well with SWM. ... Argotec is a technology and quality leader in resin-based rolled goods with strong competitive positions in attractive niche market segments. Argotec films, which are complementary to our current extruded resin production capabilities, generate attractive margins in high-value-added applications that serve diverse end-markets, such as paint protection, glass lamination, medical and graphics, offering solid growth prospects and further diversification for SWM.”

Argotec will be included in SWM’s new Advanced Materials and Structures segment. With the addition of Argotec, Villoutreix projected the Advanced Materials and Structures segment would have annual net sales approaching $300 million.

He said Argotec would be “highly complementary” with SWM’s DelStar manufacturing division, which it bought in 2013, and “we expect Argotec to benefit from SWM’s global footprint, international sales capabilities, Operational Excellence expertise, and our intention to invest capital for growth.”

Guy Broadbent, president and CEO of Argotec, added, “We are proud of our growth under Wind Point Partners and our continued product leadership serving the demanding technical needs of our customer base. We are excited to be a part of the SWM team, which we believe shares our rigorous focus on quality and high technical standards.” With SWM’s resources, he said, “We will be well positioned to accelerate our growth.”

The company was founded by Richard Barnes and Steven Wolkenbreit in 1988. Its current location is the site of the company’s first factory.

Argotec built a second plant near the first in 1999 and major additions were made to both facilities in 2005 and 2007. Its most aggressive expansion was in 2008, when Argotec doubled its square footage and capacity.

In June 2013, Argotec was sold to Wind Point Partners and in May 2014, it bought Stevens Urethane, a major producer of polyurethane film and sheet in western Massachusetts.

In February, Argotec announced it had signed a “long-term” lease with Channing Bete Co. to use its warehouse in the Greenfield industrial park.

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