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PolyPak America buys Transco Plastics poly mailer division

By: Michael Lauzon

January 21, 2013

LOS ANGELES -- PolyPak America Inc. has expanded its poly mailer capacity by acquiring Transco Plastics Industries Ltd.'s poly mailer envelope and in-line printed films division for undisclosed terms.

Acquired assets include extrusion equipment, printers and converters, said Caryn Fitleberg, PolyPak America's Chief Operating Officer, in a telephone interview. PolyPak America will move some of the equipment to its Los Angeles, Calif., headquarters plant and auction off other pieces. Equipment will remain at Transco's Montreal facility for a few weeks while Transco fulfills customer orders, then it will be relocated.

"Poly mailers [are] a fast-growing market," Fitleberg said. Her firm makes plastic mailers for shipping documents, soft goods and publications. Retailers selling over the Internet are one of the fastest-growing segments, she explained. The Transco purchase does not add any new product lines to PolyPak America.

"It is a way of increasing our capacity," she added.

PolyPak America's Los Angeles plant extrudes and prints polyethylene film. The nearby Vernon, Calif., operation converts film and ships products. In Lancaster, Pa., PolyPak America stocks a warehouse for nearby markets. The biggest geographic market is the U.S. Midwest.

PolyPak America is a certified vendor of the United States Postal Service and features in its products high clarity film designed to operate on form, fill and seal machines for delivery via parcel post.

Little of Transco's poly mailer sales were generated in Quebec and the rest of Canada, according to Fitleberg.

Fitleberg said her firm's typical poly mailers are three-layer PE constructions with each layer contributing properties such as strength, stiffness, slip and color. The mailers are mainly composed of linear low density polyethylene.

"For the past three years we have steadily invested in new capital equipment and followed a strategic plan to upgrade our production facilities and increase our capacity for the poly mailer and security envelope markets," Fitleberg noted in a Jan. 18 news release issued two days after the Transco deal was finalized.

"PolyPak America was one of the early innovators in the development of poly mailing envelopes," added PolyPak America CEO Richard Gurewitz in a news release.

"The division was sold in a continuing effort to streamline our business and to enhance shareholder value," said Transco CEO Mitch Herman in a telephone interview. Transco's continuing business will be retail plastic and paper packaging sourced mainly from offshore manufacturing partners.

Fitleberg and Gurewitz, her father, own PolyPak America. The company employs about 135 and has annual sales of $32 million. Not including the Transco deal, sales had been expected to rise to $35 million in 2013. The Transco assets will add another estimated $15 million, bringing the anticipated total to $50 million.

PolyPak America expanded in poly mailers in August 2010 when it bought certain assets from Trinity Packaging Corp. of Armonk, N.Y., and moved them to PolyPak America facilities. PolyPak America also makes heavy duty bags and film for lawn and garden, construction, minerals and mining, produce packaging and agriculture. The firm has been in business for more than 40 years.

Late last year, Transco sold its assets to make performance films, specialty bags and industrial films to AEP Industries Inc. of South Hackensack, N.J. AEP has been relocating the related assets to AEP's other plants in North America.