A Hot Recycler Is Turning Headsby
In just three months, plastics recycler Pure Tech International has acquired three companies, doubled its revenues to $70 million, and nearly tripled earnings. Little wonder, then, that its stock, trading at 8 a share in December, has raced up to 17 1/8 on June 22. "That's not the end of the acquisitions--or the rise in the stock," says Len Bogner, an analyst at Prudential Securities.
But the exciting news for some pros is the prospect of Pure Tech becoming a buyout target. Speculation has swirled of late that a chemical giant and a major consumer-products company have been talking separately to Pure Tech executives for a possible buyout bid. Chairman Simon Sinnreich wasn't available for comment. One money manager believes the company has a takeover value of 30 to 35 a share. Bogner expects Pure Tech, which recycles containers made of plastic, glass, aluminum, and steel, to make at least one more acquisition that will lift revenues to at least $100 million by 1995 and kick up earnings to $2 a share in the year ending June 30, 1995, from an estimated $1.25 in fiscal 1994, and 48 in fiscal 1993.
Joe Salvani, president of Salvani Investments, is more optimistic in his estimates: $1.50 in 1994 and $2.50 in 1995. The reason, he says, is that the acquisitions will enable Pure Tech to diversify into engineering plastics faster.
One of its recent purchases, Styrex Industries, makes custom designed molded thermoplastic parts used in the manufacture and assembly of a variety of business and consumer goods for such companies as IBM, Magic Chef, and Black & Decker.