Plastics packaging: Berry claims Rexam’s closures biz for $360mPlastics packaging: Berry claims Rexam’s closures biz for $360m
Plastics packaging processor Berry Plastics has grown from a small Indiana shop into a global player in the packaging industry, and with its most recent purchase it adds another name to its long string of acquisitions. Berry has acquired the beverage and specialty closures business of Rexam PLC, for $360m in cash.
June 20, 2011
Berry's acquisition string began in 1988 with the purchase of aerosol closure molder Gilbert Plastics. The purchases since then include Venture Packaging, the dairy closures product line of Clayton Corp., Poly-Seal Corp., Alcoa Flexible Packaging, Captive Plastics and more; a complete list is at the processor's website. In 2006, the investment groups, Apollo Management and Graham Partners Inc., purchased Berry Plastics from Jack Berry Sr.
The purchase of Rexam's closures business is expected to close in Q3 2011 and is conditional on regulatory approvals. The new Berry business employs about 1500 and is focused on the North American market. Rexam has planned the divesture for more than a year; the business was reported on Rexam's books as discontinued, with sales of £343 million ($553 million) and an underlying operating profit of £22m, but with a loss before tax of £177m including exceptional and other items. Rexam acquired the closures business as part of its acquisition of Owens-Illinois's plastics business in 2007. Rexam's closure business performs both compression and injection molding.
In a release regarding the sale to Berry, Rexam said it "plans to right-size its plastic packaging operations as a result of this transaction. This is expected to give rise to an exceptional charge of around £25m, of which £15m will be cash costs. " Rexam's other plastics processing operation are its healthcare and personal care business units.
Berry is a company we have covered frequently over the years; for access to past articles on the processor's strategy, technology and expansions, surf to this link.
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