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

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

Image

Dow Chemical to merge chlorine operations with Olin

March 27, 2015 12:43 pm ET

Dow Chemical Co. is combining a large part of its chlorine value chain with specialty chemicals and ammunition maker Olin Corp. to create a global...    More

Image

Flextronics launches global injection molding, tooling unit

March 26, 2015 4:29 pm ET

Flextronics International Ltd. (Booth S34125) is officially launching Precision Plastics, a global injection tooling and manufacturing unit, as a...    More

Image

Core Molding buys CPI Binani assets, adds markets, D-LFT capabilities

March 20, 2015 1:20 pm ET

Core Molding Technologies Inc. is expanding its thermoplastics capabilities with the acquisition of substantially all the assets of CPI Binani Inc.,...    More

Image

Proposed Cardia-Stellar merger labeled 'not fair,' but still 'reasonable'

March 20, 2015 10:34 am ET

If the proposed merger of two Australian bioplastics companies goes ahead, the new company will be called Secos Group Ltd. and have annual sales of...    More

Image

Transilwrap buys Clear Focus, expands in advertising films

March 20, 2015 10:03 am ET

Film extruder Transilwrap Company Inc. has bought Clear Focus Imaging, a manufacturer of printable plastic films for large-scale display advertising l...    More

Market Reports

Flexible Packaging Trends in North America

North America represents about 30 percent of the global consumption of flexible packaging. Annual growth in this region is forecast at 4 percent during the next 5 years.

For more insight on growth opportunities, drivers of growth and the outlook for 2015, download this report.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Plastics in Mexico - State of the Industry Report

This report analyzes the $20 billion plastics industry in Mexico including sales of machinery & equipment, resins and finished products.

Our analysts provide insight on business trends, foreign investment, top end markets and plastics processing activity. The report also provides important data on exports, production, employment and value of plastics products manufactured.

Learn more

Upcoming Plastics News Events

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

More Events