Laminate Companies: On the Move

It took until the second business day of the new year for the chips to start falling in the US printed circuit laminate industry.  On the same day, Isola changed hands and Park Electrochemical announced it was putting its PCB unit up for sale.

As the East Coast braced for a winter blizzard of epic proportions, Park Electrochemical sent a cold shiver down the spines of more than a few industry observers with its announcement of a “strategic evaluation” of its core printed circuit materials business, one that could result in a sale.

Park has been paring its PCB operations over the past few years amid falling revenues and tighter margins. Said revenues have been falling despite a rebound in the overall PCB market: Even as aerospace revenues have grown, overall Park sales have fallen year-over-year in 10 of the past 11 quarters, more than half the time by double digits.

Although it generates most of its revenue from the PCB materials unit, sources indicate the firm sees more upside in its aerospace materials division, which isn’t as susceptible to the commodity pricing pressures of board-level laminate. The sale or closure of the division could further disrupt the North America supply chain, however.

Park’s long history is heavily intertwined with that of the North American PCB industry, and one of the last remaining “family” firms. Cofounded in 1954 by Jerry Shore, his son Brian is now CEO and grandson Ben a senior vice president. Its sale, whenever that day comes, will truly mark the end of an era.

Meanwhile, in Arizona, Isola completed the transfer of its equity ownership to an investment group led by Cerberus Capital Management. This deal was not a surprise: Isola had reportedly been trying to restructure a debt load of more than half-a-billion dollars since last summer.

Isola was primarily owned by the investment firms TPG Capital and Oaktree Capital Group. It’s unclear at present how the stakes in the company are now divided. No doubt Isola won’t be one of the bidders for Park, however.

Couple this with the changes at Arlon over the past two years, and the US laminate industry continues to be in flux. Many of the other major players appear stable: Kingboard, Shengyi Technology, Nanya, Panasonic, Ventec (which merged with TMT in 2016). Among US-based vendors, Rogers’ position at the high-end has enabled it to remain financially sound. It may be the only one.

Demand for lower-tech materials isn’t enough to sustain footprints in higher-cost markets. M&A can result in stronger, more viable companies. Let’s hope that the future for Park (or whomever buys it) and Isola are brighter than the present, as the North American supply chain depends in large part on their success.

Jan. 5 update: Investment bank Needham & Co. says the Electronics unit could bring $50 million to $80 million in a sale.

This entry was posted in Laying It Out and tagged , , by Mike. Bookmark the permalink.

About Mike

Mike Buetow is editor-in-chief of Circuits Assembly magazine, the leading publication for electronics manufacturing, and PCD&F, the leading publication for printed circuit design and fabrication. He is also vice president and editorial director of UP Media Group, for which he oversees all editorial and production aspects. He has more than 20 years' experience in the electronics industry, including six years at IPC, an electronics trade association, at which he was a technical projects manager and communications director. He has also held editorial positions at SMT Magazine, community newspapers and in book publishing. He is a graduate of the University of Illinois. Follow Mike on Twitter: @mikebuetow