Middletown manufacturing company DelStar Technologies is expected to be sold in the next month to Schweitzer-Mauduit International, a Georgia-based company that specializes in paper and tobacco-based products.
The two companies jointly announced the pending $231.5-million acquisition on Nov. 18. The sale is expected to become final by the end of 2013.
"This is positive development for both our company and our employees," DelStar President and CEO Mark Abrahams said. "No one will be losing their jobs, there will be no name change and our entire management team will stay in place. But what it does do is put us in a better position in terms of our future growth strategy."
Headquartered in Middletown, DelStar is one of the world's leading manufacturers of thermoplastic netting and other water filtration components used in a variety of healthcare, automotive and industrial products.
The company generates about $110 million in annual sales through its manufacturing facilities in the United States and China. It currently employs 500 people worldwide, about a third of whom work out of its 200,000-square-foot facility in Middletown.
DelStar is currently owned by the publicly-traded private equity firm and global asset manager American Captial Ltd. of Bethesda, Md.
Abraham said the 12-year-old company's acquisition by Schweitzer-Mauduit International of Alpharetta, Ga. – better known by its New York Stock Exchange ticker symbol SWM – would result in an infusion of capital and technological support that will strengthen its position in the filtration market.
"We could not be more pleased with SWM's choice to bring DelStar Technologies into their family," he said in a statement issued by both companies. "The combined resources of both enterprises will strengthen our ability to pursue promising opportunities in our base business, as well as potential acquisitions. Together, I know we can deliver innovative advanced solutions to our diverse customer base."
SWM chairman and CEO Federic Villoutreix said the acquisition of DelStar would allow his company to expand its presence in the advanced materials market and offer new opportunities through jointly-developed products.
"The outlook for DelStar remains robust, with global demand for drinking water infrastructure expected to remain high for the foreseeable future," he said. "The strengths of DelStar and SWM are very complementary and we look forward to supporting DelStar's existing growth plan and exploring commercial synergies in selected product areas."
DelStar began a $2.5-million expansion of its Middletown warehouse in May.
Scheduled for completion by year's end, the 46,000-square-foot addition will triple the size of the company's current warehouse space and allow DelStar to expand its local production capabilities.