Onex Corp. is selling Husky Injection Molding Systems, for $2.1 billion to two private equity firms and walking away with a tidy profit.
BOLTON, Ont.: Onex Corp. is selling Husky International, better known as Husky Injection Molding Systems, for $2.1 billion to two private equity firms and walking away with a tidy profit. The Toronto-based investment firm acquired the injection molding machinery manufacturer in 2007 with an initial equity investment of $622 million.
Boston-based Berkshire Partners LLC, and Toronto-based OMERS Private Equity Inc., the private equity arm of the OMERS Worldwide group of companies, will jointly acquire the Bolton, Ont.-based Husky and its subsidiaries, which design and manufacture injection molding machines, hot runners, molds and integrated systems.
Onex expects to net $1.8 billion, including a prior $98 million distribution for a gain of $635 million, including carried interest. The deal is to close early in the third quarter.
Lisa Melchior, managing director of OMERS said Husky is poised to benefit from growth in emerging markets. “We believe the future opportunities for this company are extremely attractive,” she said in a release.
Husky was founded by German immigrant Robert Schad in 1953, starting out as a small machine shop in a Toronto garage that has grown into a US$1.1 billion developer of specialized injection molding machinery and services, employing 3,000 people worldwide.
Shad, 81, who retired in 2005 and has been chairman since 2006, held 44% of the company’s shares with his wife when Onex proposed a takeover in 2007, which they accepted.
Prior to the sale, the company’s stock had been in decline for three consecutive quarters and despite investments in technology and an expanded distribution network, earnings were down in 2004 and 2005.
“Through our partnership with Onex, Husky has focused its efforts to reduce waste, shed non-core and non-performing assets, and re-invested in better solutions and services to our core market customers,” said John Galt, who will continue to lead Husky as president and CEO.
Anthony Munk, a managing director of Onex, noted that in just over three years, Husky’s operating profit has more than doubled as a result of its successful transformation plan. “This is an extraordinary accomplishment given the operating environment that this business faced since we acquired it in late 2007,” he said.
In March, the company announced its intention to acquire KTW of Waidhofen, Austria, which specializes in closure mold making. The sale is expected to close this month.
KTW-branded closure molds will be offered as part of Husky’s fully integrated turnkey systems. The company said the addition of KTW molds makes it the closure industry’s only provider of complete injection molding systems.
Husky’s equipment is used to manufacture a wide range of plastic products such as bottles and caps for beverages, containers for food, medical devices and consumer electronic parts. The company has more than 40 service and sales offices supporting customers in over 100 countries, and manufacturing facilities in Canada, the US, Luxembourg and China.