The Bottom Line: NewSpring Invests in Star Plastics
February 02, 2022
NewSpring, a family of private equity strategies, announced today that NewSpring Mezzanine, the Firm’s dedicated mezzanine strategy, has invested subordinated debt and common equity to support Akoya Capital’s acquisition of Star Plastics.
Star Plastics is a North American provider of custom engineered compounds and specialty products
Star Plastics is a leader in providing customers with high-quality engineered compounds, product solutions, and services. With its product formulation expertise along with its process technology and lab testing capabilities, Star Plastics offers a broad line of high-quality, custom engineered compounds and specialty products for high performance and demanding end-use applications. Star Plastics also provides toll compounding and secondary services and sources and resells a wide range of engineering resins. With its technical expertise and strong product knowledge, the Star Plastics team has become a leading custom compounder and specialty products and services company in North America, serving the E&E, communications, and appliance markets.
The company is differentiated by its strong expertise in color compounding
Star Plastics has a lineup of 140+ UL-recognized products, which can take up to a year and millions of dollars to establish, creating a solid barrier to entry for competing companies. Star Plastics has ingrained itself as a critical component of many of their customers’ production processes, leading to strong customer retention. With a reputation for quality, customization, and the ability to meet emerging customer needs, Star Plastics has created long-lasting customer relationships, some of which extend more than 20 years.
Star Plastics will use the proceeds of this transaction to pursue rapid growth
Star Plastics intends to pursue both organic growth initiatives as well as M&A to continue its expansion in the growing global plastic compounds market. Specifically, the company intends to place additional focus on direct sales efforts by adding sales and business development resources in new geographies. Star Plastics will also pursue M&A opportunities that have the potential to diversify its customer base and extend its product line.
“With a worldwide reach and more than 130 full-time employees, Star Plastics has grown significantly in our 33 years in business. Throughout our growth, we’ve maintained a relentless focus on producing positive outcomes for our customers and growing our relationships. As the need for high-quality custom plastic compounds continues to grow, we look forward to leveraging our new partnership with NewSpring to bring these value-adding products to our growing roster of clients across the globe.”
Star Plastics is led by a management team with decades of experience in the plastics market
The company’s experienced management team continues to bring in additional resources and support, most notably incoming CEO Don Wiseman and incoming Chairman Bob May, two plastics industry veterans with deep connections and expertise. Star Plastics Founder and now Chief Strategic Officer and Board Member Doug Ritchie will continue to play a key role in the company’s future.
“Star Plastics has built its reputation as an industry leading provider of custom plastic color compounds and tolling services over the course of its long history in this growing market. We see ample opportunity to continue growing the business through M&A and organic initiatives as demand for custom plastic compounds continues to grow. We’re excited to work with Don and Bob as we take Star Plastics to new heights.”