Recycling products and services firm Straight PLC (STT.LN) said Monday it has bought its injection moulding partner for GBP2.9 million, marking its first entry into making its own products.

Straight will pay an initial GBP970,000 for Dyro Holdings Ltd.--which trades as Powell Plastics--and two further cash payments of GBP970,000 on each of the first and second anniversaries of completion.

The initial payment has been funded through a GBP1.5 million loan from its lending bank, Lloyds Banking Group PLC (LLYO.LN). The balance will be funded from cash generated as a result of the acquisition.

Hull-based Dyro operates more than 20 injection moulding machines. Straight believes the addition of Dyro's manufacturing capability will boost profitability and strengthen its position in its main markets.

Dyro has been a supplier to Straight for a number of years but trading between the two has increased considerably in the last six months as Dyro operates the wheeled bin production equipment acquired by Straight from Helesi in March.

Straight said Dyro's location will also provide it with a new U.K. distribution hub and an excellent base for its growing exports business.

-By Hannah Benjamin, Dow Jones Newswires; 44-20-7842-9298; hannah.benjamin@dowjones.com
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