Salt Lake City-based thermoformer Premier Plastics Inc. is taking on new financial partners with an aim to expand operations.
Banner Ventures, a private equity firm based near Salt Lake City, is the new lead investor in Premier, which was founded by Jim Holbrook in 1989.
Holbrook retains what is described as "a meaningful ownership stake" and will remain CEO of the firm, Banner said.
"What attracted us to Premier was a strong market leadership in the Intermountain West," said Tanner Ainge, managing partner with Lehi, Utah-based Banner, in a Jan. 3 interview.
For Holbrook, the decision to add partners serves two purposes: helping to fuel expansion and ensuring a future for the firm beyond his working years, he said in an interview.
Holbrook made it clear, however, that growth is on the front burner as he's not looking to exit the company anytime soon.
"I'm 60 years old, and there's going to be another chapter of life in the next three to five years. This sets the company up. We feel this is a very strong position for Premier Plastics' growth in the future," he said. Joining Banner in the investment are Ron Labrum and Tony Orsini, who co-invested through Seventeen Capital LLC.
"We firmly believe in Premier Plastics' ability to expand and scale to the next level," Orsini said in a statement.
Orsini and Labrum both previously worked at Flexan LLC, a maker of molded and extruded rubber, silicone and thermoplastic components, subassemblies and devices for the medical and specialty markets. Labrum was chairman and Orsini was chief operating officer at the company sold last year to ILC Dover LP.
Premier Plastics currently has about 65 employees, and the new investors have a goal of doubling operations in the next few years. The company's "long and steady growth" over the decades attracted the new investors, Ainge said. "With the investment, Premier will be in a position to rapidly expand capacity to meet what we see as an incredible growth plan," he said.
The company does have some existing capacity to increase business, but not enough to double sales. That's where the new cash comes in.
While Ainge said he sees a future where sales can double, Holbrook said he sees the potential for even triple the current total. Premier has relied on organic growth over the years, which was fine. But management decided about 18 months ago that there was an even greater opportunity to expand by considering acquisitions. Bringing on additional investors helps fund those aspirations, Holbrook said. "For the last 32 years, we have built Premier Plastics into a market leader without any outside capital. We have the team, the capability and the market reputation to double our scale in the near term — but to do so I needed to bring in capital partners," Holbrook said in a statement. "After considering all of our options, I felt like Banner was the right partner to continue building on our great legacy and success."
"With this partnership, Premier is not only looking to expand its own footprint to service the existing customer base, but we are developing strategic partnerships with new customers as well as looking for acquisitions in the plastics space," Ainge said.
Premier will consider "smaller or peer-sized competitors" as acquisition candidates, he said.
Banner was attracted to the investment, its first in plastics, for several reasons. "Really, in this case, it was the chance to invest in a market leader here in our region and the team and the strength of the customer base. Going forward, we think it's going to be a continually strong segment, particularly within the medical device category," Ainge said.
Premier was No. 79 in the most recent listing of thermoformers in North America compiled by Plastics News. The company had 2020 sales of $16.2 million, including 91 percent from packaging and 9 percent from industrial, and seven thermoforming lines, according to the listing.
Holbrook, in the interview, said 2021 sales increased to about $19 million.
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