Outlook Group Corp. of Menasha, Wis., has agreed to buy and expand Barrier Films Corp. in a flexible packaging integration plan. Barrier Films, established in late 1992, has two multilayer blown film lines in Sparks, Nev., according to Bill Wright, the firm's president and majority shareholder. Since summer, Outlook Group has been the exclusive distributor of Barrier Films products in 46 states, Canada and Mexico.
``We see a receptive market for [Barrier Films'] products, and with our resources we can expand their capacity more quickly,'' said David Erdmann, Outlook Group's president and chairman.
Company officials did not disclose terms of the agreement, which they hope to complete this month.
Erdmann said his firm plans to spend about $1.6 million for a third blown film line at Sparks, sourcing components from various suppliers. The line should begin operating in July or August, he said.
Wright said his firm built its original line, a three-layer unit, to supply California produce markets. It bought its second line from Davis-Standard to make five-layer film for meat, poultry and cheese processors.
Barrier Films' lack of printing and converting capability limited its ability to sell directly to five-layer barrier film markets, which rely on finished packaging suppliers, Wright said in a telephone interview. He expects Outlook Group's printing and converting operations to eliminate that hurdle.
Outlook Group has printing, laminating and converting operations in Wisconsin and Kansas. Barrier Films will be its first film production operation.
Outlook Group, a publicly traded firm, had sales of $112.6 million and profit of $4.8 million for its year ended May 31. Its operations include packaging distribution and food processing.
Wright estimated Barrier Films' sales at $2.5 million for the year ended Dec. 31. Erdmann said he expects the Sparks expansion to boost Barrier Films' sales to $5 million to $6 million in Outlook Group's next fiscal year, beginning June 1.
