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Waddington set to buy Canadian thermoformer Par-Pak

By: Michael Lauzon

May 16, 2013

BRAMPTON, ONTARIO -- Canada-based thermoformed packaging company Par-Pak Ltd. is slated to be bought by Waddington North America Inc., a major plastic tableware producer.

Moody’s Investors Services reported that Waddinton’s parent company, WNA Holdings Inc. of Covington, Ky., plans to take out a line of credit for the purposes of buying Par-Pak and to refinance debt obligations. Moody’s assigned a B1 rating for the first lien credit of $500 million and a Caa1 rating for the second, $150 million lien credit for WNA.

Waddington is based in Covington and was acquired by Olympus Partners of Stamford, Conn., in November. Waddington’s products include disposable plastic plates, cups and cutlery for catering, food service and consumer markets.

A news report indicated Waddington will pay more than $300 million for Par-Pak, a private firm based in Brampton, Ontario, with facilities in Houston, Texas, and Milton Keyes, England. Par-Pak reported North American sales of US$108 million for the year ended June 30, 2011, according to Plastics News’ thermoformers ranking. Total sales were US$166 million for the 522-employee company. It processes polystyrene and PET, largely for bakery customers.

Spokespersons for Waddington and Olympus could not be reached. Par-Pak’s management said it had no comment on the proposed deal.

Moody’s said WNA sales for the year ended Dec. 31, 2012 would be about $566 million pro forma the impact of the Par-Pak acquisition.

“We view the Par-Pak acquisition a credit neutral event overall,” stated Moody’s lead analyst John Zhao in a news release commenting on the Waddington deal. “While financial leverage will increase initially, we expect that the company will generate solid free cash flow to pay down debt and reduce its leverage steadily in the next 12-18 months.”

Last fall Waddington bought Eco-Products Inc., a Boulder, Colo., producer of environmentally sensitive food service products. Waddington also owns Polar Plastic Ltd., a disposable food service products company based in Montreal.