New York -- SpongeTech Delivery Systems Inc. has extended its expertise in hydrophilic urethane chemistry by spending $4.45 million to buy Dicon Technologies, which specialises in research and development into products made using such chemistry.
In the deal, SpongeTech will net about $10 million in annual revenues and about $1.5 million in pre-tax earnings. Dicon currently sells products made as private-label brands through US outlets in food, drug and mass market stores, such as CVS, Walgreens, Kmart and Wal-mart. It also sells direct to large commercial clients. SpongeTech intends to exploit these outlets immediately. Dicon also currently has distribution in Asia.
According to SpongeTech's ceo, Michael Metter, acquiring Dicon was prompted by an "overwhelming increase in sales and demand for our products."
In the deal SpongeTech is buying exclusive rights to the technology it uses to make its products. It also gains a more efficient, rapid R&D process to grow its product lines, as well as adding current and future products in Dicon's portfolio, Metter said, in the company's 10 July announcement.
Dicon was set up in 1975, and is a recognised innovator in product development, according to SpongeTech. The Black Creek, Georgia-headquartered company operates a state-of-the-art 30 000 sq.ft (2800 sq.m) research and manufacturing facility and has more than 65 researchers, product development and manufacturing personnel at work on current, and future products.
SpongeTech, which recently announced a move to sell its products in Europe, also announced 10 July that it had added new orders worth $6.9 million to date in July.