By: Bill Bregar
May 3, 2012
EVANSVILLE, IND. (May 3, 12:55 p.m. ET) — Ira Boots, the high-profile former top executive of packaging giant Berry Plastics Corp., said he is pumped up to become chairman of Milacron LLC and help lead the only remaining U.S. broad-line plastics equipment maker.
“My quest to continue to maintain and grow jobs in the USA remains a priority,” he said.
News that Boots, 58, will join Milacron’s board of directors as chairman came in an April 30 announcement that CCMP Capital Advisors LLC has completed its acquisition of the Cincinnati-based plastics machinery maker.
The existing management team will remain in place, including CEO Dennis Smith and Dave Lawrence, president of worldwide plastics machinery for injection, extrusion and mold technologies; Dean Roberts, president of aftermarket services in the Americas; and Robert McKee, president of global industrial fluids. The management team will continue to retain an ownership stake.
Milacron generated about $780 million of sales in 2011, from injection molding machines, extruders, blow molding machines, structural foam molding machines and industrial fluids used in metal cutting.
Boots said Milacron today is “right back into a powerhouse situation” after an “incredible turnaround.”
“We are clearly poised for additional growth,” he said in a telephone interview.
CCMP bought Milacron from Avenue Capital Group, in a deal between two New York-based private equity firms. Terms were not disclosed. Avenue Capital had provided debt refinancing to Milacron when the financially troubled machinery maker filed for Chapter 11 bankruptcy in early 2009, then emerged from bankruptcy five months later.
Chapter 11 allowed Milacron to reorganize its balance sheet. Avenue Capital also reinvested money into the company.
“I have admired Dennis Smith and team Milacron on the resurrection that they have been able to accomplish with Milacron,” Boots said.
Boots is well-known in the private equity industry and Wall Street. Berry Plastics had sales of less than $60 million in sales in 1990, when Boots and other executives began reaching out to private equity investors. After a string of acquisitions, within five years, Berry had more than quadrupled sales, to $250 million.
More recently, Evansville, Ind.-based Berry Plastics generated sales of $4.65 billion for the fiscal year ended Oct. 31, 2011. In March, Berry announced plans for an initial public offering.
Boots, a toolmaker by trade, started in 1978 at Imperial Plastics in Evansville (which later became Berry) as manager of the tooling department.
Boots retired from his position of Berry chairman and CEO in 2010. Then, last fall, he left Berry’s board of directors.
Since then, Boots, who lives in Evansville, has been doing volunteer work and educating himself about Internet marketing and social media. “How to use modern-day tools such as social media and how to apply them to older-style companies,” he explained.
Smith said Boots’ long years of experience in packaging will give Milacron a valuable perspective.
“From my perspective, having him on the board is a real plus, because he has been an end user of equipment for many years. He understands the applications and will help us in that market,” Smith said in a telephone interview.
Smith called Boots “a fountain of knowledge” about packaging. “This is exactly the kind of person I want on my board,” he said.
Demand for plastics machinery has rebounded strongly after the black hole of recession in 2008 and 2009. Milacron and other plastics machinery companies have beefed up employment to meet demand.
Milacron employs 2,848 around the world at factories in the United States, Germany, India and China. In Ohio, Milacron employs 805 at its main assembly plant in Batavia and a machining plant in Mount Orab.
Boots said the opportunity was too good to pass up, since he feels comfortable with CCMP and respects Milacron’s role as a major U.S. equipment maker.
“That brought me out of retirement with a lot of excitement, to help the U.S. manufacturing economy and in this case, to help this company as well,” Boots said.
CCMP used to be an investor in Berry Plastics. The private equity firm exited that position in 2006.
Smith said Avenue Capital did a good job of bringing Milacron through Chapter 11, so that now the company can be a strong player in the economic rebound. Avenue Capital specializes in firms with distressed debt. The fast recovery means “we simply got out of their sweet spot,” he said.
CCMP Capital Advisors specializes in upper-middle market buyouts and equity investments of $100 million to $500 million.
Strong results from NPE, Chinaplas
Meanwhile, in trade show news, company officials said that both NPE2012 in Orlando and Chinaplas in Shanghai were strong shows for Milacron.
Smith said executives were “very happy with the results” from NPE in Orlando.
“We had high traffic. We had a lot of people that were decision makers and interested in going forward on projects. It supports what we see in the world today, of continuing demand to upgrade productivity in our customers’ shops.”
At Chinaplas, the company’s German unit, Ferromatik Milacron GmbH, announced a major sale of all-electric injection presses to China: 113 Elektron machines to a single customer.
In the first quarter of this year, Milacron Plastics Machinery (Jiangyin) Co. Ltd. received an order for 85 Elektron presses, ranging in clamping force from 50 to 155 metric tons. The same customer ordered 28 additional 260-metric ton Elektrons at Chinaplas.
A company spokeswoman said Milacron would not identify the customer in China, or its plant locations.
But Milacron did indicate what products they will mold, in a news release announcing the sale. The first 85 Elektrons are going to two locations, where they will produce electronics components for a “well-known American manufacturer of computers and entertainment devices,” the company said. Of those 85, Milacron has already delivered 30 presses. The second set of 28 machines will be shipped in the third quarter.
The 28 larger Elektrons will be used to make household items.
Milacron has produced Elektron presses at its Jiangyin factory since 2009. Gerold Schley, managing director of Ferromatik Milacron and vice president of China operations, said a combination of the price-performance ratio, fast delivery times and outstanding service from the China operation helped close the sale.
The customer is currently discussing an additional order for 10 multi-component makes from Ferromatik Milacron in Malterdingen.
Ferromatik Milacron said the customer already is running about 40 of its K-Tec hydraulic presses for multicomponent molding.
Schley said the China plant has hired new employees, increasing its total workforce to 120 people. The China operation marked its best quarter since it was founded in 2004, he said.
About 90 percent of the Elektron presses produced in China stay in China, Schley said.
Chinplas visitors saw the largest Elektron yet, a 450-metric-ton model.