K-Tron International will acquire certain assets of Wuxi Chenghao Machinery Co., Ltd. in China. Wuxi Chenghao is a privately held company and is one of the leading feeder and ancillary equipment manufacturers for the plastics compounding and injection industries in the People’s Republic of China. The total cost of the transaction over a five-year period, including the purchase price and payments under related employment and other arrangements with Wuxi Chenghao’s current owner, could be as much as $3.5 million. The acquisition is expected to close early in 2007 and is subject to various closing conditions, including certain required governmental approvals in the PRC.
Wuxi Chenghao is located in Luoshe Key Open Industrial Park, Wuxi City, in the Huishan district of Jiangsu province, approximately 60 miles west of Shanghai. The company designs, manufactures, markets and services volumetric and gravimetric single and twin screw feeders and controls, vibratory trays, pelletizers and pneumatic screen changers for use in plastics compounding and injection molding processes. Wuxi Chenghao, with approximately 60 employees, was founded in 2002 and has established a leading position in the domestic PRC market for industrial feeders. K-Tron expects to obtain approval to form a wholly-foreign owned entity under PRC laws which will purchase certain assets from Wuxi Chenghao and serve as the entity to conduct the business following the closing.
Last month, K-Tron acquired Premier Pneumatics, a manufacturer of pneumatic conveying and bulk handling equipment based in Kansas.