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

New medical firm buys Clairson Plastics

September 19, 2014 4:33 pm ET

Custom injection molder Clairson Plastics is being sold to a new start-up that plans to dive into the medical market with a new dialyzer, a key...    More

Image

Hong Kong's TK eyes expansion, may buy Nypro Tool operation

September 19, 2014 2:49 pm ET

Hong Kong-based mold maker and plastics processor TK Group (Holdings) Ltd. said it's reached a tentative agreement to buy a tooling factory in...    More

Exo-s buys injection and blow molder in Mexico, expands footprint

September 19, 2014 2:15 pm ET

Custom molder Exo-s Inc. has bought an injection and blow molding operation in San Juan del Rio, Querétaro, Mexico.    More

Image

Bayer spinning off plastics business

September 18, 2014 8:49 am ET

Bayer AG will spin off its MaterialScience plastics group into a separate, publicly-traded company within the next 12 to 18 months.    More

Badger buys competitor Joseph Homa

September 17, 2014 4:04 pm ET

Badger Plug Co. has extended its protective plugs customer base by acquiring and closing a rival, Joseph Homa Consultants Inc. of Montreal.    More

Market Reports

Plastics Caps & Closures Market Report

The annual recap of top trends and future outlook for the plastics caps & closures market features interviews with industry thought leaders and Bill Wood’s economic forecast of trends in growing end markets. You will also gain insight on trends in caps design, materials, machinery, molds & tooling and reviews of mergers & acquisitions.

Learn more

Shale Gas Market - Analysis of North American Region

This report highlights the impact of shale-based natural gas on the North American plastics market and features an in-depth analysis of production trends in the United States during 2013 and a forecast for 2014 and beyond.

Learn more

Thermoformed Packaging 2014 Market Review & Outlook – North America

This in-depth report analyzes economic and market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as growth strategies being implemented by thermoformed packaging companies.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

More Events