PHOENIX—Rubber recycling firm LandStar Inc. has purchased the outstanding shares of Phoenix-based PolyTek Rubber & Recycling Inc., the world's largest crumb rubber producer, for an undisclosed amount.
LandStar also has agreed to buy the crumb rubber assets of Rubber Recovery Ltd. for $250,000.
With the deal LandStar gets PolyTek's crumb rubber facilities in Queen Creek, Ariz., and Bristow, Okla., according to LandStar. Also included are plants in Chambersburg, Pa., and Flat Rock, Mich., which PolyTek purchased last June from Toronto-based NRI Industries Inc.
These facilities have an annual capacity of more than 150 million pounds of crumb. PolyTek's yearly revenues before the sale to LandStar were about $17 million per year, LandStar said. The company's acquisition of PolyTek grew out of a chance meeting last October between LandStar President D. Elroy Fimrite and the president of PolyTek, according to Terry Karpiuk, LandStar vice president of corporate development.
LandStar plans to retrofit the PolyTek facilities with manufacturing equipment for its proprietary "Activated Modified Rubber" devulcanization process. It will use an unspecified amount of crumb for its AMR material, as well as selling crumb "out the back door" to PolyTek's established customers, Mr. Karpiuk said.
"In order for us to be successful, we obviously need crumb rubber," he said. The company will spend about $5 million each, or $20 million total, to retrofit the four facilities, he added.
The company hasn't decided yet whether to retain the PolyTek name for the crumb rubber operations.
"PolyTek has been around a lot longer than LandStar," Mr. Karpiuk said. Similarly, although it will retain a sales presence in Phoenix, LandStar hasn't yet determined whether to maintain PolyTek's headquarters in Phoenix or move it elsewhere, he said.