John LeMay provides a brief case study on Quality Synthetic Rubber in a recent issue of Smart M&A

John LeMay provides a brief case study on Quality Synthetic Rubber in a recent issue of Smart M&A John LeMay discusses Quality Synthetic Rubber (QSR).

“In the rubber and plastics sectors, it is about finding niche markets with a positive growth dynamic and a high degree of engineering value-add. Generally speaking, we see more value-add potential in material engineering in the rubber sector.”

“Depending on the application and functional performance requirements—take a rubber seal or a noise dampener—the part actually has to physically perform over the life of the application,” says Blue Point’s LeMay. “Rubber moves and reflects temperature and heat, so the engineering and design can be more complex than that of a plastic part.”

It is these dynamics that attracted the sponsor to Quality Synthetic Rubber of Twinsburg, Ohio. When Blue Point acquired QSR in July 2007, it was primarily an automotive supplier with a small medical business and a small operation in China. “QSR’s primary products are silicone seals used in electrical connectors that historically were sold into the transportation market,” LeMay says. “What we liked about the QSR niche is the parts are relatively inexpensive but critical from a functionality and cost-of-failure standpoint.”

There continues to be rapid growth in terms of the electrical functionality designed into cars and trucks, LeMay says, and that is driving increased demand for electrical connectors and therefore electrical seals. “Even if the same number of cars is built every year, there will be more of these connectors and seals that are sold. The volume per vehicle is increasing.”

Blue Point is actively looking to diversify QSR’s end markets, pointing to growing applications for the company’s products in the medical and aerospace industries. Silicone is the desired material for QSR’s end market applications because of its chemical resistance and functionality in a broad range of temperatures. The material is capturing share in the growing medical market because of its ability to be sterilized and maintain clean work environments. LeMay says, “The medical silicone market is growing and the engineering value-add make it an attractive market.” Blue Point has been able to grow QSR organically by expanding manufacturing capacity and hiring additional engineering and sales talent. The company is also working on the integration of Limtech, a medical silicone processor that was acquired in November 2011, and doubled the size of QSR’s medical business. QSR is also realizing significant growth in serving Asian end markets from its facility in Guandong, China.

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