Berry Plastics buying Rexam's remaining healthcare operation

PLASTICS NEWS REPORT

Published: March 24, 2014 7:20 am ET
Updated: April 7, 2014 3:15 pm ET

Related to this story

Topics Packaging, Medical, Mergers & Acquisitions, Injection Molding
Companies & Associations Rexam PLC

Berry Plastics Group Inc. is buying the containers and closures division of Rexam plc’s healthcare operation for $135 million in cash, London-based Rexam announced on March 24.

The deal, once approved and following consultation with Rexam’s French works council, is expected to complete around the middle of this year. Rexam has been selling units to focus solely on its can operations.

The deal includes eight manufacturing locations — five in the United States and one each in Mexico, France, and India, with total employment of approximately 1,500 and 2013 sales of $262 million. It includes the Rexam Mold Manufacturing group in Buffalo Grove, Ill., which produces tools used for the company's healthcare businesses.

Berry Plastics, based in Evansville, Ind., reported 2013 sales of $4.715 billion, and has been active in acquiring plastics businesses — most recently it bought a controlling interest in Qingdao P&B Co. to give it a bigger foothold in China.

Christopher Manuel, a senior analyst with Wells Fargo Securities, called the deal with Rexam "a solid opportunity for Berry to cultivate synergies.

"In its current state, we estimate EBITDA [earnings before interest, taxes, depreciation and amortization] from the containers & closures to be $18 million to $20 million," Manuel wrote in a March 24 email. "From Berry's perspective we believe the synergy opportunity could be meaningful as the company folds the business into existing operations (similar to the Rexam SBC business), though this would likely come at a cost."

Rexam’s healthcare business is divided roughly into three business segments — devices, prescription retail packaging and containers and closures.

Last month Rexam announced the proposed sale of the pharmaceutical devices and prescription retail packaging operations of its healthcare division to Montagu Private Equity for $805 million.

At the time of that deal, Rexam said it was “in discussions” regarding the sale of the remaining third of its healthcare business, its closures and containers operation.

Rexam said the sale to Montagu Private Equity was “progressing according to plan” and was expected to complete in the second quarter of 2014.

Last year Rexam sold its personal-care packaging division for $709 million to two separate buyers, leaving the healthcare operation as its major remaining plastics holding. Rexam's healthcare division makes delivery devices such as insulin pens, asthma inhalers and pumps as well as bottles and closures.

PRW.com contributed to this report. Watch PlasticsNews.com for updates to this story.


Comments

Berry Plastics buying Rexam's remaining healthcare operation

PLASTICS NEWS REPORT

Published: March 24, 2014 7:20 am ET
Updated: April 7, 2014 3:15 pm ET

Post Your Comments


Back to story


More stories

Image

Sealed Air's move to Charlotte will put it all under 'One Roof'

July 25, 2014 2:03 pm ET

Sealed Air Corp. shook the ground last week by announcing plans to relocate its headquarters from Elmwood Park, N.J., to Charlotte, N.C., in a move...    More

Image

Columbine Plastics moving to new Colorado site

July 25, 2014 11:38 am ET

Custom injection molder Columbine Plastics Corp. plans to move from Boulder, Colo., to the Colorado Technical Center in Louisville, Colo.    More

Image

Metals and plastics company NN to buy Autocam in $300 million deal

July 25, 2014 10:07 am ET

A Tennessee metals and plastics company said it has agreed to acquire auto parts supplier Autocam Corp. in a deal valued at $300 million.    More

Image

Chinese auto suppliers growing in US

July 24, 2014 4:17 pm ET

Two China-based automotive suppliers are expanding in the U.S., according to information released by the Michigan Economic Development Corp.    More

Image

Bemis' product strategy paying off with record earnings per share

July 24, 2014 2:56 pm ET

Bemis Co. Inc. is feeling good about itself these days as the flexible packaging and pressure sensitive materials firm is posting record earnings per ...    More

Market Reports

Plastics Recyclers Data Report & Directory

This exclusive MS Excel database contains all the companies from Plastics News' ranking of top North American Recyclers and Brokers by reprocessed volume and also includes a directory with materials processes, services offered and company contact information. Data is based on primary research by PN editorial staff.

Learn more

2014 Injection Molding Industry Report

GROWTH, OPPORTUNITY IN SIGHT FOR INJECTION MOLDERS IN 2014

In the wake of the economic turbulence earlier in this decade, molders today find themselves in much better shape. Molders are gaining a competitive advantage by investing in people, equipment and seeking inroads into new markets on a global scale.

Growth in the injection molding industry is going to be driven by low financing costs and a continued move to reshore some business.

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

Upcoming Plastics News Events

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

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

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

More Events