Nolato buying GW Plastics to build up North American operations

Torekov, Sweden - Swedish injection moulder Nolato AB has made a big move for growth in the US, buying Vermont-based medical supplier GW Plastics Inc., bringing it both plastics and LSR moulding operations.

The CEOs of Nolato AB and GW Plastics Inc. say the two companies are an excellent fit, with complementary medical and automotive moulding businesses and similar corporate cultures.

"Over the years GW has been approached by a lot of companies. The one that resonated, even when we were not interested in selling, was Nolato," Brenan Riehl, president and CEO of GW Plastics, said in an 6 Aug telephone interview.

"The way they treat their workforce, the similarities between our companies and cultures, the way we do business," Riehl said.

Nolato President and CEO Christer Wahlquist summed it up by saying both companies have a culture built on trusting employees.

"When you trust people, great things will happen," Wahlquist said in the same phone interview.

Torekov, Sweden-based injection moulder Nolato announced its big move for growth in the US market on 6 Aug, buying Bethel, Vermont-based GW Plastics Inc.

The deal for SEK2 billion (€194 million) will give Nolato Medical Solutions, the company's medical business unit, a stronger position in North America. GW Plastics has both plastics and liquid silicone rubber medical moulding operations.

Riehl added that the companies have complementary automotive moulding businesses, too. The deal is expected to be completed in September.

Most of GW's operations, a little more than four-fifths, will report to Nolato's medical business unit, with the rest becoming part of its Industrial Solutions operations.

GW was founded in 1955 by John Galvin and Odin Westgaard, who both had extensive plastics industry experience. They sold to Carborundum Co. in 1973. After a series of deals, GW passed to Standard Oil of Ohio in 1981.

In 1984 a group of managers and investors led by Frederic Riehl—Brenan's father, and the current GW chairman—bought the company from Sohio.

Wahlquist called GW a well-managed, well-invested company, and said Nolato does not plan to make any changes. He said GW's size and geographic presence will enable significant market synergies over time.

As an example, Riehl said the GW medical business is very strong in the surgical device market, while Nolato is "extraordinarily strong" in diagnostic devices.

"That puts us in a really strong position with our medical customers," Riehl said.

Wahlquist added that GW is "extremely driven" in scientific moulding, which is expertise GW can share with Nolato.

The two companies started talking seriously about a deal about 18 months ago, Wahlquist said.

"We've had GW on our radar for many, many years. We've heard about them from our customers, and we were intrigued and interested in them," Wahlquist said. "We've met them at trade shows, and we initiated discussions about one and a half years ago.

"GW has a very strong corporate culture, very similar to the Nolato corporate culture. The way they treat people, the way they mould. And I have a lot of respect for their management," Wahlquist said.

Nolato dates back to 1938, and started medical moulding in 1950. Wahlquist headed the company's medical moulding unit for 20 years.

Riehl said GW has been able to grow from a single plant in Vermont in 1984 to seven plants on three continents today. GW's factories are in Bethel and Royalton, Vermont; San Antonio, Texas; Tucson, Arizona.; Querétaro, Mexico; Dongguan, China, and Sligo, Ireland.

Nolato has 10 plants in Sweden, six in China, two in Hungary, one in Romania, two in Malaysia, one in Poland, one in Switzerland and one in England. In North America, in addition to the Wisconsin plant, it also has a silicone extrusion plant in Andover, New Jersey.

Nolato, which is publicly traded, posted 2019 sales of SEK7.9 billion and after-tax profit of SEK703 million.

Riehl said he and existing GW management will stay with the company.

"It's important to us that we have a really solid transition. Especially to our customers, and of course for our workforce," Riehl said. "We both insisted that the organisations stay the same."

Wahlquist said he had an opportunity to visit all the GW sites before travel restrictions brought on by the coronavirus pandemic. The two CEOs laughed when asked if Covid-19 made finalising the deal difficult.

"It's been a testament to our teams that we were able to do this while having to deal with Covid-19," Riehl said. "We stuck through with it while we kept our workplace safe and our customers secure. It was a lot of hard work."