Spray Foam Equipment Manufacturer Continues Vigorous Pursuit of Anti-trust Claims Against Graco, Inc.
LAKEWOOD, NJ- February 1, 2012 - Polyurethane Machinery Corporation (PMC), a manufacturer of polyurethane spray foam equipment, announced that it continues vigorously to pursue its claims against Graco, Inc. [NYSE:GGG] for violation of federal antitrust laws. PMC takes special note of recent antitrust enforcement proceedings brought against Graco by the United States Federal Trade Commission (FTC), in which the FTC has expressed concern that Graco’s proposed acquisition of the industrial liquid finishing equipment business of Illinois Tool Works could lead to anticompetitive consequences that PMC notes are remarkably similar to those about which PMC has been complaining in the polyurethane spray foam equipment market
Since 2008, PMC has been prosecuting antitrust claims against Graco in the United States District Court for the District of New Jersey. Among other things, PMC has alleged that, following Graco’s acquisitions of Gusmer Corp. and GlasCraft, Inc., Graco systematically raised the prices of spray foam equipment, while simultaneously attempting to inhibit PMC’s entry into the market by threatening distributors with retaliation if they choose to do business with PMC.
PMC takes note, therefore, that the FTC has expressed nearly identical concerns regarding the possible consequences of allowing Graco’s acquisition of ITW’s industrial liquid finishing equipment business to proceed. In particular, the FTC has alleged that allowing Graco to acquire a dominant share of the market would result in a market in which “no existing competitors can or would constrain Graco post-acquisition from imposing price increases on industrial liquid finishing equipment.” Moreover, the FTC explicitly expressed its concern that, post-acquisition, distributors would “fear retaliation from Graco if they carry other brands.” The FTC’s administrative complaint against Graco can be found on the FTC’s web page: http://www.ftc.gov/os/adjpro/d9350/111215gracoadmincmpt.pdf
PMC notes that in an effort to convince the FTC not to proceed with its complaint against Graco, Graco proposed to the FTC that Graco would write to its distributors and confirm that those distributors, post-acquisition, would remain free to carry competing brands, and that Graco would refrain from unusually large price increases for three years. Yet, PMC has alleged that in the spray foam equipment market Graco has offered its distributors no such peace of mind, instead electing to use threats of reprisals against distributors to inhibit PMC’s ability to compete on a level playing field, while imposing stiff price increases.
Insofar as the FTC is scrutinizing Graco, PMC encourages any spray foam equipment distributor that fears retaliation from Graco if it carries competitive lines of that distributor’s choosing to bring those concerns to the attention of the FTC by contacting Laurel Price, Esq., FTC, Bureau of Competition, Anticompetitive Practices Division, 601 New Jersey Ave., N.W., Washington, DC 20580, 202-326-2146.
SprayFoam.com contacted Graco for comment regarding the case and this press release, but no comment or response was received or rendered back.
Contact:
Rick Engen
PMC Global, Inc
12243 Branford Street Sun Valley, CA 91352-1010
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