Investment firms combine two plastic lumber companies, on the hunt for more

A pair of plastic lumber companies making outdoor furniture and building products have come together under one corporate umbrella with plans to expand.

Chicago-based holding company Premier Outdoor Living LLC acquired both Recycled Plastics Industries LLC of Green Bay, Wis., and Highwood USA LLC of Hometown, Pa., which also has another manufacturing site in Hazelton, Pa.

“It’s really about what we would call separate but fast-growing trends that we view as secular and ongoing,” Premier CEO Randy Ahlm in an interview.

The first trend, he said, is an ongoing transition from what Ahlm’s calls traditional materials such as metal and wood to synthetic materials that are generally plastic based.

The second trend is that people are spending more time in outdoor living spaces.

“That’s a market that’s growing by 8 to 10 percent-type numbers every year,” he said. “With those two trends, an intersection of that is the outdoor living, synthetic lumber market.”

The move to create Premier was put together by Kaho Partners LLC and Nassau Point Investors LLC, two private investment firms. While the acquisition of RPI happened in February and Highwood was added in August, the private owners are only now talking about plans for growth.

“Premier Outdoor Living is well positioned to capitalize on the growth in outdoor living and the secular shift from traditional building products to superior, longer-lasting synthetic products," said Kaho co-founder and Premier Chairman Max Katzenstein in a statement.

The investors decided to pursue opportunities in plastic lumber and associated products and brought Ahlm on board to lead the effort. He has more than 15 years of experience heading manufacturing businesses, including recent leadership stints at injection molder PSI Molded Plastics in Chicago and Imperial Plastics Inc. of Minneapolis.

RPI makes plastic lumber from recycled high density polyethylene, and other companies use those profiles in outdoor products. Highwood makes both plastic lumber as well as finished goods for the spa and outdoor furniture markets. The two companies have about 250 employees in total.

Dating to 1989, RPI was one of the oldest names in the plastic lumber market.

RPI was founded by Lee Anderson in 1989 in Green Bay, but that operation was sold to U.S. Plastic Lumber Corp. in 1997. USPL, however, eventually closed the site in 2001 as part of a company-wide reorganization of its nationwide manufacturing footprint. USPL ultimately declared bankruptcy.

Bet Jandron, who had been with RPI since 1991, stepped in to create a second incarnation also called Recycled Plastics Industries in 2002. She rehired many of the employees who lost their jobs when the Green Bay site shuttered, according to previous Plastics News coverage.

While terms of the deal were not disclosed, Premier did indicate the company will continue to pursue “add-on acquisitions that add complementary customer relationships, channels to market, and production capabilities.”

Both RPI and Highwood will operate as independent brands and independent companies, Ahlm said.

“Premier Outdoor Living is a holding company where we will operate multiple brands as we continue to acquire,” he said.

The CEO expects Premier to grow through both acquisitions and also from within each separate company. One area of organic growth will be movement into adjacent markets such as RPI making products for the outdoor furniture segment.

“We’re actively talking with several other groups right now in that outdoor living space where they use synthetic material,” Ahlm said. “We certainly expect to do more acquisitions in the coming year.”