If a deal in the works goes through, a New York investment group will become the new owner of Dolco Packaging Corp. Newly formed Packaging Acquisition Corp. plans to buy the public company, subject to Dolco stockholder approval, according to a Dolco news release. PAC is owned by MST Partners L.P. of New York and MST Offshore Partners CV. Terms were not disclosed.
Last year Dolco, based in Studio City, Calif., reported sales of about $67 million for thermoformed polystyrene foam egg cartons, meat trays, clamshells and other food packaging. It employs about 605 at plants in Decatur, Ill.; Lawrenceville, Ga.; Wenatchee, Wash.; and Dallas.
Dolco directors already have endorsed the sale, which now hinges on majority consent of its stockholders and receipt of a fairness opinion being written by Dean Witter Reynolds Inc. If stockholders concur, they will receive $21 for each share of common stock, and $4 plus accrued dividends for each preferred share, Dolco corporate secretary Maggie Earley said Nov. 8. Dolco stock closed at $20 a share on Nov. 8.
MST Partners refused to comment on the pending acquisition or on its other nonplastics holdings, including a 4.5 percent interest in Renal Treatment Centers Inc. in Berwyn, Pa. The investment partnership was founded in 1989, and specializes in buying midsized specialty manufacturing and distribution businesses, according to the news release.
Larry Rembold, Dolco's president and chief executive officer, also did not want to disclose information about MST, including its location.
Dolco expects the transaction to be final by January.
In May, the company hired Dean Witter to assist it in considering financial options to enhance shareholder value. But Earley said she did not know whether, or to what extent, Dean Witter was involved in the board's decision to sell the firm.
The fairness opinion will assess whether the deal seems financially fair to stockholders, a Dean Witter spokesman said by phone from New York.
In an April 10 proxy statement, Dolco named Dow Chemical Co. of Midland, Mich., and Huntsman Chemical Corp. of Salt Lake City among its major stockholders, owning 35.9 percent and 9.57 percent, respectively, of common stock.
In 1994 Dolco reported profit of $4.77 million, or $2.70 per share.
For the nine-month period ended Sept. 30, it had sales of $59.9 million and profit of $3.69 million, or $2.10 per share. The stock is traded on the Nasdaq system.
