Plastipak Packaging buying Constar International

By Don Loepp
Editor

Published: February 7, 2014 2:06 pm ET
Updated: February 7, 2014 2:39 pm ET

Related to this story

Topics Packaging, Mergers & Acquisitions, Blow Molding
Companies & Associations Constar International LLC, Amcor Ltd.

Plymouth, Mich.-based Plastipak Packaging Inc. has emerged as the successful bidder for the U.S. assets of blow molder Constar International Holdings LLC.

Plastipak will pay $102.45 million for Constar's assets, according to a Feb. 6 asset purchase agreement.

According to court documents, Judge Christopher Sontchi in the U.S. Bankruptcy Court in Wilmington, Del., is scheduled to approve Plastipak's bid on Feb. 10. Trevose, Pa.-based Constar had filed for Chapter 11 protection from creditors on in December.

The sale of Constar's assets started in bankruptcy court, but they ended up in a bidding war between two of North America's largest blow molders.

Hawthorn, Australia-based Amcor Ltd. originally looked like it was going to end up the winner. It was the stalking horse bidder when Constar first filed for protection on Dec. 19. Amcor is North America's largest blow molder, according to Plastics News data — the company's regional headquarters is in Ann Arbor, Mich.

But Constar said the transaction with Amcor was subject to higher and better offers, and within a few weeks after the deal was announced, two other potential bidders emerged: Plastipak and Atlanta-based CKS Packaging Inc. Both filed objections with the court over the rules Amcor and Constar had set up for the sale.

On Feb. 6, Amcor announced that it was dropping its bid for Constar. An Amcor spokesman explained to Plastics News that it had been outbid by another company. At the time, the spokesman would not name the actual buyer.

He would not say how much the winning company paid, but said "at the end of the day the nature of an auction is that the winning bid doesn't have to be much more than the losing one.

"At a certain price it no longer fits the criteria. Amcor has a well-defined returns focus for investments and will remain disciplined in its approach to acquisitions," he said.

"Constar went into bankruptcy and part of the process was for liquidators to establish the best possible price."

Industry sources suggest Constar would have been a relatively small bolt-on acquisition for Amcor. According to Amcor, Constar's U.S. business now has six plants and annualized sales of about US$190 million.

Still, the deal generated attention in the packaging sector, in part because of their history. Constar was a pioneer in the PET bottle business, and a few decades ago Constar and Amcor's U.S. predecessor — Johnson Controls Inc. — were major rivals and the top two blow molders in North America, according to Plastics News' rankings.

The PET market has changed significantly since then, though. Today Amcor and Plastipak have leading positions, but many of their customers, including soft drink and bottled water bottlers, now have their own bottle manufacturing operations.

Plastipak was North America's No. 3 blow molder in Plastics News' most recent ranking, with 13 plants and sales of $1.65 billion.

Correspondent Kate Tilley contributed to this report.


Comments

Plastipak Packaging buying Constar International

By Don Loepp
Editor

Published: February 7, 2014 2:06 pm ET
Updated: February 7, 2014 2:39 pm ET

Post Your Comments


Back to story


More stories

PolyQuest spins off FiberQuest unit

April 18, 2014 10:14 am ET

PolyQuest Inc. has spun off its FiberQuest unit — which distributes polyester staple fibers and cotton — as a separate company.    More

Spain's Cristian Lay Group buys two materials units of bankrupt LSB

April 17, 2014 11:11 am ET

Spanish industrial conglomerate Cristian Lay Group has purchased two of the bankrupt Spanish PET packaging group La Seda de Barcelona.    More

MGS buying N.Y. medical molding plant from Hospira

April 17, 2014 10:19 pm ET

MGS Manufacturing Group is purchasing the Buffalo, N.Y., injection molding facility and related product line of Hospira Inc., effective July 1. Terms ...    More

Image

Navigating the rough seas of selling your company

April 17, 2014 2:47 pm ET

For family owned plastics firms who survived the Great Recession, many wonder: Is it time to sell, retire and sip cocktails on the beach? Or, maybe...    More

Negri Bossi's new owners may 'bring significant manufacturing' to US

April 16, 2014 1:09 pm ET

Italian plastics equipment major Negri Bossi may “bring significant manufacturing of injection molding machines back to the United States”...    More

Market Reports

Thermoformed Packaging 2014 Market Review & Outlook North America

This in-depth report provides analysis and discussions of economic and political conditions, market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as strategies being implemented by thermoformed packaging companies. In addition, there are reviews of 25 leading thermoformers in the packaging segment, assessing their growth initiatives and performance metrics over 10 years.

Learn more

Automotive Market Review and Outlook 2014 The Americas

This 75-page report features in-depth analysis of the automotive industry for the Americas. It includes discussions of market trends, legislative/regulatory activity impacting production and threats as well as design strategies being implemented by the major automakers. Detailed charts and data tables outline North American automotive production over the last five years.

Learn more

Plastics Building & Construction Market Review and Outlook 2014 with MS Excel chart data

This report provides in-depth analysis of the plastic building and construction market for North America, including discussions of trends, opportunities, threats and the latest developments in construction trends that impact plastics processors.

Learn more

Upcoming Plastics News Events

May 6, 2014 - May 8, 2014Plastics in Medical Devices 2014

May 12, 2014 - May 12, 2014Plastics News Brazil Pharma Summit

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

February 3, 2015 - February 7, 2015Plastics News Executive Forum 2015

More Events