Twinsburg, OH-based Quality Synthetic Rubber (QSR) is a 45-year-old manufacturer of highly engineered, molded rubber components that started with a hope and prayer when two brothers partnered with their uncle, and set up a small shop in the garage. The company has since evolved beyond the garage and into a 130,000 square foot facility.
In the early 1980s, QSR, a connector seal supplier, began producing medical components. In 1994, the business had expanded to the point in which the company chose to spin off the medical business and incorporated Medical Elastomer Development (MED), which now produces high-precision silicone components, such as vessel loops, IV components, catheters, and surgical and sterilization components.
Times are good for QSR/MED. In early November, the company announced the acquisition of Wisconsin-based Quadra, which does business under the brand name Limtech as a leading manufacturer of custom-molded silicone products for the medical, dental, industrial, and consumer markets. Limtech provides MED with added technical abilities, such as rapid prototyping and extra clean-room capacity.
QSR has a history in a variety of different elastomers, polymers, and molding, but 20 years ago, it began to narrow its focus down to a band of silicone technologies. The company was initially an automotive business when silicone materials became the preferred technology for electrical sealing, and it quickly became one of the top two electrical connector seal producers in the world.
“Silicone suddenly became a preferred technology in the medical device world 20 years ago, and the fact that QSR had experts in silicone molding, albeit in automotive/industrial, gave the company the lead when certain medical opportunities came along,” says MED president and CEO Randy Ross.
QSR/MED, which are housed in the same Twinsburg facility, is built with a strong family culture. After all, it was owned by the same people for 40 years until it was sold to private equity. A lot of the employees have seen the growth of the company, lived it, and been a big part of it.
“When I came in a few years ago, I was coming from a big corporation background, and I looked at the culture at QSR/MED, and I thought that it was a critical culture to keep because it really drives a strong passion towards taking care of the customer,” Ross adds.
The Deal
Talk of acquisition started in January 2011 as a one-on-one dialogue between Ross and Quadra/Limtech owner Vic Stepaniuk. Quadra was not being marketed, and was not openly for sale, but by sitting down and talking with Stepaniuk, Ross began to construct a vision that would make the former owner comfortable.
The chats lasted for more than three months, because for Stepaniuk, it was personal. He had built Quadra and Limtech from a similar humble beginning. He wanted to make sure that the new owner was coming in with a clear plan.
The biggest difference between the two companies is that Quadra is a 60-year-old company that comes from a toolmaker and molder background, whereas QSR/MED comes from a molding, polymer science background. QSR is currently trying to translate more of its services into MED by utilizing the black-box engineering services that have made the company a hit with customers.
“Customers will send us drawings of some of their components, and we go ahead and design in the interface or seals that would join those parts together,” Ross states. “We understand molding technology, and we have the material science vertically integrated into our plant.”
QSR/MED has chemical science chemists and an A2LA-accredited lab on site. The core compounding knowledge of the material allows the company to specifically design a compound to a specific application. The core material science doesn’t directly translate into the medical space, because the company has chosen to forego the effort to achieve FDA approval.
“We’re not going to design things that directly interact with the human body because of the liability,” says Ross. “For certain devices’ non-human contact points for sealing, we clearly understand the dynamics of polymers interfacing with these sealing applications.”
MED is capable of evaluating all of the materials from the big silicone producers and applying that knowledge to the way the materials will perform in customer applications -- MED acts as a filter to help customers find the best polymer available on the marketplace.
Quadra doesn’t have the material science in its core competencies, and it is one area that QSR/MED will immediately complement. QSR/MED also has a greater internal capability and is unique in building its own equipment to achieve a quality end product. The company has internal automation engineers that have designed in robotics for part removal from the presses. The company also builds, designs, and programs its own automatic vision equipment.
“It sounds simple,” says Ross, “but I come from big companies that outsource. There are a lot of companies that will come and do automation for you, but the key differentiator for us is that our automation is based on our understanding of silicone fabrication. We don’t build [frivolous] automation because it’s neat, we know when to apply automation to facilitate a better process.”
According to Ross, having automation engineers who are completely intimate with the core process allows smart automation to be designed into the production system.
Value Reciprocity
Any merger has to have value flowing in both directions. QSR/MED has quite a small tool shop, and the company wasn’t able to make any of its own medical tools or prototypes. QSR/MED was dependent on the outside market to supply it tools, which was inherently less efficient and slowed the response to the customer.
The Quadra side of Stepaniuk’s old business brings a strong tooling background that will allow the new entity, MED/Limtech, to make fast prototype samples, and add integral rapid tool building and prototyping capabilities. According to Ross, QSR/MED wanted to make 50 percent of its tools and acquire the other half from suppliers. QSR/MED was a molding company, not a mold-building company like Quadra, and demand had caused internal tool production to drop to 15 percent.
“We knew that we could go buy a tooling company or tooling equipment, but we found a great molding company in Limtech that brings an incredibly powerful tool shop that is under utilized.” The other integration advantage from the deal was Limtech’s rapid prototyping capabilities.
“Limtech does a great job of rapid prototyping with a quick turnaround time,” says Nick Brust, vice president of business development at MED. “We didn’t have the same capacity, and it will be a huge advantage to help us bring products to market faster.”
Limtech has prototype low-volume transfer presses, which were designed and built by Quadra. They have standard bases and sizes with interchangeable inserts. With a tool shop in-house, Limtech is able to have bases premade with cavities in standard inserts. According to Brust, it simplifies turnaround and the presses are running all the time.
Limtech also brings small injection presses to the table. The company doesn’t do as much fully automatic, cold runner, high-volume running. It’s more of a mid-range volume with a lot of color changes -- something that QSR/MED didn’t have much cause for with 100-million-piece orders.
In the medical device industry, silicone has been used for a long time. It has a lot of history that only continues to grow with new medical companies and an aging population. With the acquisition, MED/Limtech will offer several key benefits to its customers, including faster time to market with new products as a result of Limtech’s tooling capabilities, greater production capabilities, and a second manufacturing location.
Looking back, you can only wonder if the two brothers and the uncle expected such a manufacturing operation to have been born from such meager beginnings.
