Buying a plastics or chemical manufacturer in Florida

Small plastics companies make parts and products by injection molding, extrusion, thermoforming, rotational molding or fabricating from plastic sheet. Rubber shops mold gaskets, seals and custom parts. Small chemical companies blend and package cleaning products, coatings, adhesives, pool chemicals, fertilizers and personal care products, often for other companies to sell under their own brands.

In Florida, customers include marine and boat builders, medical device companies, pool and spa suppliers, construction and irrigation companies, agricultural businesses and consumer brands. Work comes as purchase orders or supply agreements for the same parts or products month after month, which can make revenue steady.

You'd be buying machines (molding presses, extruders, mixers, tanks, filling lines), molds and tooling, formulas, raw material supply and certifications. In molding, many molds belong to customers even though they sit in the shop, so you'd be buying the right to run them, not the molds themselves. The team is process technicians, maintenance mechanics, a quality manager, chemists who work on formulas, and production workers. Resin and chemical prices move with oil and gas markets, so it matters whether the company can pass price changes on to customers.

• Supply agreements with repeat customers across several industries, so a slump in boatbuilding or construction doesn't idle the plant.
• Pricing that passes raw material changes through to customers, ideally written into the agreements.
• Well-maintained presses and equipment with spare capacity, and spare parts on hand for the machines that matter most.
• Clear, signed records of which molds and formulas belong to whom.
• A quality system and the certifications customers require, such as ISO 9001, or medical device standards for medical work.
• Process technicians and a maintenance lead with years at the company.
• A clean environmental and safety record, with permits and reports kept current.
• Products or formulas of its own, which earn more than contract work.

Florida doesn't license plastics or chemical makers as such, but several permits need attention in a sale:

• The plant may hold air permits from the Department of Environmental Protection (DEP) for resin, solvent or coating emissions. Buyer and seller sign a transfer application, due within 30 days after the sale (rule 62-4.120). A plant that operates under an air general permit must register again after a change of ownership, and the new registration takes effect 30 days after DEP receives it (rule 62-210.310).
• Plants that store hazardous chemicals above federal thresholds must file a chemical inventory, called a Tier II report, by March 1 each year through the Florida Division of Emergency Management.
• A sale normally means sending DEP an updated hazardous waste notification (form 8700-12FL). Ask whether the site's EPA ID number carries over.
• Medical device and cosmetic makers need DBPR permits, and a change in majority ownership needs a new application before closing (section 499.012).
• Pool sanitizers and disinfectants count as pesticides, so each brand must be registered with the EPA and with FDACS, the Florida Department of Agriculture and Consumer Services (section 487.041). Fertilizers need an FDACS license for the company named on the label (section 576.021). Ask whose name each registration is in.

Chemical makers also have duties under the federal Toxic Substances Control Act. Have an environmental consultant review compliance before you sign.

• An environmental site assessment of the property, especially where chemicals are stored or spills could have happened. Lenders often require one for manufacturing sites.
• Permits, inspection reports and any violation notices.
• How much of sales goes to the largest customers, and the terms of supply agreements, including how much notice a customer must give before moving work.
• A mold list, signed off by customers, showing who owns each mold and what condition it's in. Worn molds may need costly repair soon.
• Raw material suppliers, and how price changes are passed on.
• Machine age, maintenance logs and energy costs. Molding and extrusion use a lot of electricity.
• Safety records, including injury logs and any serious incidents.
• Product liability insurance, and any claims involving parts that failed in customers' products.

• Who are your largest customers, and do you have written supply agreements with them?
• Which molds and formulas belong to the company, and which belong to customers?
• What do you do when resin or other raw material prices go up?
• What permits does the plant hold, and have there been any inspections or violations?
• What chemicals are stored on site, and how much of each?
• Who runs production and maintenance day to day?
• How close is the plant to full capacity?
• Which products carry EPA, FDACS or DBPR registrations or permits, and whose name are they in?