Progressing with the efforts to streamline its business
Myers Industries Inc.
) yesterday sold WEK Industries Inc., which formed a part of its
Engineered Products Segment, to Industrial Opportunity Partners for
nearly $19.5 million. Industrial Opportunity Partners owns Toledo
Molding and Die Inc.
The sale included WEK Industries' manufacturing facilities and
offices located in Jefferson, OH, and Reidsville, NC. WEK
Industries primarily sells custom blow molded plastic parts for the
automotive industry. The unit delivered annual net sales of about
$36 million in 2013 for Meyers Industries.
Myers Industries' strategy of simplifying its business portfolio is
based on the expansion of its leadership position in the Material
Handling Segment while preserving a strong market position in the
In an attempt to develop its Material Handling segment, earlier
this month, the company penned a deal to acquire Scepter
Corporation and Scepter Manufacturing LLC (Scepter). This
acquisition, comprising warehouses, manufacturing facilities and
offices in Oklahoma, Scarborough, Miami and Ontario, is expected to
hike the segment's sales by 30%. Myers expects the acquisition
worth $165.0 million to close within a month.
Scepter is a leading manufacturer of molded plastic material
handling products for various markets including marine, industrial,
consumer and military. The company generated net sales of about
$100.0 million in 2013 and is renowned for its state-of-the-art
mold capacities and in-house product engineering facilities.
The acquisition of Scepter is expected to enable Myers to
strengthen its foothold in the Material Handling segment and extend
its global reach. The deal is also expected to enhance its
assortments and position the company well for long-term growth in
the nascent markets.
Simultaneously, the company initiated the sale of its distressed
Lawn & Garden Segment in order to concentrate on operations
with growth prospects. The sale is expected to close within a year.
Taking into consideration all these transactions, the company has
decided to realign its reporting segments from four to two. The
company will now on report operating results in two segments namely
Material Handling and Distribution from the second quarter of
fiscal 2014 10-Q filing. Previously, the company's reportable
segments included Material Handling, Lawn & Garden,
Distribution and Engineered Products.
Following the sale of WEK Industries and as part of the
realignment, the company dissolved its Engineered Products Segment
and split up the remaining businesses in the segment namely, Patch
Rubber Company and Ameri-Kart Corp., into its Distribution and
Material Handling Segments, respectively.
The new Material Handling Segment will now comprise industry
leading brands like Buckhorn Inc., Akro-Mils, Novel, Myers do
Brazil, Jamco Products Inc., Ameri-Kart, and Scepter, after
conclusion of the recent acquisition deal.
The new Distribution Segment will include Myers Tire Supply, Myers
Tire Supply International, and Patch Rubber Company.
Other Stocks to Consider
Myers Industries currently has a Zacks Rank #3 (Hold). A
better-ranked stock in the rubber & plastics industry is
Proto Labs Inc.
) with a Zacks Rank #1 (Strong Buy). Other better performing stocks
in the broader retail sector include
Citi Trends Inc.
Christopher & Banks Corp.
), both carrying a Zacks Rank #1.
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