Two major thermoforming companies could be one as early as August. Ivex Packaging Corp. of Lincolnshire, Ill., is buying Wheaton, Ill.-based CFI Industries Inc. for about $18 million. Both companies ranked in the top 30 of Plastics News' North American thermoformers ranking in February.
Ivex, a privately held company, is an extruder and thermoformer for the food packaging industries. The publicly held CFI thermoforms plastic packaging for the hospital/medical industries.
``This acquisition is very strategic to our objective of growing our business in a continuous manner, either by internal expansions or by acquisitions,'' said Frank Tannura, chief financial officer and vice president for Ivex.
The merger is subject to a 30-day due-diligence period by Ivex, approval by two-thirds of CFI's shareholders, a proxy statement, and review by the Federal Trade Commission. Equity Holdings, which owns about two-thirds of CFI's common stock, has agreed to vote its shares in favor of the merger, according to a release.
There are two million CFI shares outstanding, currently valued at $6 per share. If approved, the merger would give shareholders $6.25 per share. The all-cash deal includes the common stock and assumed debt.
``The CFI board believes the Ivex offer represents a good and fair value for the company,'' CFI Chairman Phil Calian said.
CFI would become a privately held firm as a result of the merger. Susan Obuchowski, a CFI spokeswoman, said this would save Ivex money in filing costs and mailing reports to shareholders.
Ivex was No. 4 in Plastics News' recent thermoformers ranking with related North American sales of $100 million. The firm, which has $330 million in long-term debt, had considered an initial public offering last fall to ease its debt load. But officials do not see the acquisition as a burden.
Tannura said Ivex still is investing and acquiring. And although plans to become a public company are ``not totally out of the picture, the company is continuing to evaluate its options,'' he said.
``Eventually, we want to reduce our debt level but it is not a burden to our investments now,'' Tannura said.
``We're a $500 million business with about half of that in consumer packaging. We extrude and thermoform for the food packaging markets. This acquisition will help us expand into markets beyond food packaging, '' he said.
Officials at CFI would not comment on the issue of Ivex's debt.
Ivex, acquired in October 1989 by Acadia Partners L.P., is an accumulation of businesses, some of which date back 80-90 years, said Tannura. The majority of its acquisitions happened in the late 1980s and early 1990s. Ivex operates 17 plants in the United States and Canada and a joint venture in Mexico, and employs a total of about 2,500.
Its subsidiary Kama Corp. polymerizes styrene from the mono-mer then extrudes film and sheet for Ivex's use or to sell. Ivex thermoforms polyethylene and polystyrene. Kama extrudes PS and PET film and PS sheet.
CFI is a holding company in which its Plastofilm division, acquired in 1985, operates the plastic thermoforming manufacturing. It was 27th in Plastics News' thermoformers ranking with sales of $31.3 million. CFI will become a subsidiary of Ivex, and Plastofilm's operating structure will remain in place with the same employees, Tannura said.
The firm has plants in Wheaton, Ill., and Sparks, Nev., and will be opening a plant in Northern Ireland in early July.
The Enniskillen, Ireland, plant initially will employ 20-30 and is expected within four to five years to have 70 employees.
Some work currently done in Wheaton will be moved to the Irish plant, which represents an investment of $3 million to $4 million. For example, Obuchowski said CFI will shift its work for Baxter International Inc. to the Enniskillen plant.
Although CFI would not disclose the number of lines it plans to install in Ireland, Obuchowski said one line had been purchased and all lines will be Lyle Industries-brand machines.
