Running ahead
Family business Mold-Masters is a world-leading supplier of speciality components to the plastics industry. Mold-Masters has an unrivalled reputation for technological excellence and is working in partnership with 3i to achieve rapid international growth.
An outstanding reputation
Mold-Masters was established in 1963 by the husband and wife team of Jobst and Waltraud Gellert. Since then, the Canadian company has developed a world-wide presence and an outstanding reputation
for innovation and customer service. It has clients in over 40 countries, including major corporations such as Unilever, Hewlett-Packard and Procter & Gamble. Mold-Masters’ core product is hot runners, a high value component in the plastic injection molding value chain. Hot runners are the conduit between the injection molding machine and the mold. These are sophisticated devices that distribute molten plastic within a mold, enabling the manufacture of a vast range of products. Because hot runners contain heating devices, the plastic remains free-flowing until it has achieved its final shape. This is vital when making precision products, and helps cut waste and cycle times.
A respected family heritage
As Mold-Masters grew, the Gellerts made plans to continue its success to the next generation. As a first step, their son-in-law, Jonathon Fischer, became CEO in the 1990s. By 2007, the Gellerts were ready to take the next step in their succession planning by inviting in an equity investor. By selling part of their shareholdings, the Gellerts would realize some of the value they’d built over the decades, while preserving an ongoing interest in the business. At the same time, Mold-Masters would gain a partner who would actively support the company’s continued growth while firmly respecting its family heritage. As the largest company in a $1.5bn, fastgrowing global market, Mold-Masters was clearly highly attractive as a potential investment.
A partnership approach
3i learned about the opportunity through its extensive network of relationships and initiated discussions with the family. In Jonathon Fischer’s view, 3i was clearly the strongest candidate: “Although a number of private equity firms were interested, 3i stood out. They have deep experience of working with family-owned industrial businesses. They’re very strong internationally and they focus on practical support for the company's long-term development.”
Technological leadership
In October 2007, 3i invested $135m in Mold-Masters to become the major shareholder. 3i Partners Ken Hanau, who led the deal, and Ulf von Haacke sector specialist, have joined the Board. Ken commented: “Mold-Masters is an outstanding company. There’s a constant demand for new hot runners in redesigned plastic products because its client base is well diversified by sector and geography, and the large spare parts business generates a stable revenue stream.” Perhaps the most impressive feature of Mold-Masters is its technological excellence. The company spends more on R&D than any other hot runner company and has registered over 1,600 patents. In the Wall Street Journal’s 2007 Patent Scorecard, the strength of Mold-Masters’ intellectual property made it one of the top ten companies in the Industrial Components sector – ahead of giants such as 3M and GE.
International strengths
Mold-Masters has long been doing business in many international markets. It set up units in Japan and Germany in the 1980s and, under Jonathon Fischer’s leadership, has opened factories in Brazil, the USA and China. As Jonathon reflects: “International growth is central to our ambitions. 3i’s on-the-ground presence in three continents will play a vital role in helping us to maximize the results from our existing facilities and fully explore other attractive markets, such as India and Eastern Europe.” In addition to geographic expansion, Mold-Masters will grow its product range so that it can provide the plastics industry with solutions that naturally complement its hot runner technology. With 3i’s support, the expansion in the product range will come not simply through a continued focus on R&D but also through selective acquisitions.
Deep leadership experience
To help the management team make the most of its opportunities, 3i has introduced Hamdi Conger as Chairman. Hamdi has a strong track record of helping western industrial businesses succeed in India and China. He chairs several other companies for 3i, including parts manufacturer NORMA Group and Hyva, a leader in hydraulic systems. Hamdi is excited by the prospects for Mold-Masters: “This is a business that already has annual revenue of $200m and the world number one position, yet also has huge potential – to expand geographically and by product, to continue developing its outstanding technology, and to consolidate its leadership position in what remains a fragmented market. I only work with businesses when I believe I can help them double their size, and the outlook for Mold-Masters is excellent!”