Max Machinery spins off unit

John Max started his first business in his parents' garage when he was 26, building equipment for processing liquid plastic.

He moved Max Machinery Inc. to Healdsburg in 1972, setting up shop in a converted bowling alley. One of his early machines dispensed resin for plastic calculator parts.

Max Machinery grew into a global business with 60 employees and estimated sales over $10 million a year.

Now it's moving in a new direction, selling its polyurethane process equipment unit so it can focus on precision flow meters.

The spinoff company, called Max Process Equipment LLC, will stay in Healdsburg, said David Whitney, CEO of the new business. There are opportunities for both companies to grow, said Whitney, who was CEO at Max Machinery before leading the spinoff.

"We'll be able to focus on the expansion of our product line and development of new capabilities," Whitney said.

Tim March, another former manager at Max Machinery, co-owns the new company with Whitney.

The original company will explore new applications for its precision flow metering technology, said Max Machinery president Oliver Max, the son of John Max, who died in 2004.

The flow meter business has expanded beyond polyurethane, so it made sense to split off that business, he said.

"It will allow both sides to focus on what they do best," said Max.

The value of the deal, which closed last month, was not disclosed. Under its terms, the two companies will share some administrative functions and the new company will make components for Max Machinery.

Max Process Equipment has 44 employees, while Max Machinery will retain 16.

The spinoff will occupy Max Machinery's original location at 1420 Healdsburg Ave. The flow meter business continues at the south end of town.

Max Machinery has grown in recent years, due in part to soaring demand for petroleum. Customers use the company's flow meters to measure fluids including petrochemicals, adhesives, coatings and additives.

The highly accurate flow meters, which sell for $1,500 to $6,000, also are used in research labs.

The other product, urethane process equipment, is used to manufacture cast polyurethanes for a variety of industrial applications, including oil pipe and oil tank linings.

Polyurethanes also coat the conveyor systems used in mining oil sands, a growing source of North American petroleum.

Max Process Equipment's technology heats, conditions, dries and agitates polyurethane material before it is mixed. The computer-controlled machines, some as large as a bus, sell for $300,000 to $1.5 million each.

Cast polyurethanes also are found in paper-roll coatings and recreational products such as skateboard wheels.

About half of the Max urethane process units are shipped to manufacturers outside the United States, Whitney said.

The urethane equipment business grew 30 percent in 2007 and 20 percent this year, he said. Still, manufacturers are starting to feel the impact of the global economic slowdown, Whitney said.

"We're seeing some softness" in the market for machinery, he said. "People are becoming a bit more cautious," Whitney said.

Max Process Equipment will be in a good position to grow when the economy recovers, he said.

You can reach Staff Writer Steve Hart at 521-5205 or steve.hart@pressdemocrat.com.