Flamemaster, the Sun Valley maker of flame-retardant coatings, acquired a 6.8% stake in Hydro Flame Corp. of Salt Lake City and said it might pursue a merger or other alliance. Hydro Flame, whose $30 million in annual sales are six times those of Flamemaster, makes wood-burning stoves, stoves for recreational vehicles (RVs) and housewares.
In a telephone interview Monday, Flamemaster President Joseph Mazin said his company has not offered to acquire Hydro Flame, but "we're willing to have an alliance with them. We think this is a vehicle to get a wider market for our products." For instance, Hydro Flame could sell Flamemaster's coatings to RV manufacturers along with its stoves, he said.
Mazin also said Flamemaster is not going after Hydro Flame "in a hostile fashion," and that any agreement would be pursued only "if they're willing." Mazin said he plans to meet with Hydro Flame executives within the month.
However, Hydro Flame President Von Whitby said in an interview that his company "has no interest at all at this time" in teaming with Flamemaster. He said the two companies had held informal talks about Hydro Flame providing marketing assistance to Flamemaster, but otherwise "we don't see any commonality of fit."
Flamemaster said it paid about $150,000, or an average $2.25 a share, for 66,137 of Hydro Flame's 972,600 shares outstanding. At that price, it would cost Flamemaster about $2 million to buy the remaining stock, which is traded over the counter.