Methode acquires Nypro's injection molding and painting business in Mexico

Methode Electronics, Inc. a global developer of custom engineered and application specific products and solutions, has acquired certain assets and liabilities of Nypro Monterrey, S. de R.L. (Nypro Monterrey) from Nypro Inc. Per agreement with Nypro, the specific terms of the transaction were not disclosed. Methode will operate this injection molding and painting business under the name of Advanced Molding and Decoration, S.A. de C.V. (AMD), and it will become a part of Methode's existing Monterrey manufacturing campus. Nypro Monterrey operates a state-of-the-art facility, which will provide Methode with high-quality injection molding, painting and decorating capabilities. The assets include 52 injection mold machines, three paint lines and several pad print machines. The facility intends to continue production of injection-molded components for its current customers, whose contracts will transfer to Methode along with the assets. Additionally, 228 Nypro employees will transfer to Methode. The acquisition will reduce Methode's costs over a Greenfield approach by approximately US$8 mln. The Company anticipates investing approximately US$7.5 mln in additional capital to complete the vertical integration process. Methode estimates the acquisition and integration will be between US$1.3-2 mln dilutive to earnings during the first 12 months following the acquisition. Sales from AMD are expected to be between US$20 mln and US$25 mln during that same period. Methode President and Chief Executive Officer Donald W. Duda said, "We have been experiencing significant quality and delivery issues with suppliers relating to an intricate paint process for the production of automotive center consoles. Although we put in place a number of corrective actions and process improvements during the last several quarters, we believe the vertical integration of a portion of these processes will be the best solution to provide our customers with better and more consistent quality."
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