As the latest in a series of planned acquisitions, Pretium Packaging augmented its blow molding operations by buying Pocono P.E.T. Inc. of Hazleton, Pa.
``We wanted to become a full-service packaging provider and we wanted to be stronger in the PET business,'' Keith Harbison, Pretium Packaging president and chief executive officer, said in a telephone interview.
``It is very difficult to start one machine at a time,'' Harbison said. ``We targeted them because of their size and technical strength.''
Pocono P.E.T. operates nine single-stage and two-stage blow molding machines and employs 65. It had blow molding sales of $13.5 million for the year ended Dec. 31, 1996.
The deal means St. Louis-based Pretium can offer injection blow molding, extrusion blow molding, stretch blow molding, injection molding, decorating, assembly and custom services, Harbison said.
The purchase was completed Jan. 9 and terms were not disclosed.
Some 98 percent of Pocono's business is devoted to food packaging, giving Pretium a much stronger foothold in that end market. Pretium's primary end markets include medical, household, industrial and agricultural chemical, personal-care and motor oil packaging.
``We have been pursued by just about everyone in the last three years,'' said Jack St. Pierre, Poccono president and CEO.
He said the company has been ``one of the most profitable and respected PET container suppliers.''
Initially, Pocono rejected most inquiries and backed away from serious negotiations, he said. But in February, after being pursued aggressively by major U.S. packaging companies, the firm got involved with some negotiations. That's when the company got to know the small management group of Harbison Corp., which does business as Pretium Packaging.
``They were the most sincere and willing to really do what it takes to keep our identity in the forefront of customers and roll us into the fold of the major business,'' St. Pierre said.
``Why mess with success?'' he added.
After eight or nine months of negotiations, the firms reached an amicable agreement. The acquired firm will be known as the Pocono P.E.T. division of Pretium Packaging. St. Pierre will remain president of the division and of any other PET operations that Pretium acquires, starts or adds to existing plants.
Operations and personnel will remain the same and the Hazleton plant will expand, Harbison said.
``We will expand PET throughout the Pretium organization, adding stretch blow molding in various plants,'' he added. ``We will integrate the sales base and technical capability on a companywide basis.''
Pretium runs 70 blow molding plants in Easton, Pa.; Hermann, Mo.; Anaheim, Calif.; and Seymour, Ind. It employs 550 and reported blow molding sales of $52.5 million for the year ended Sept. 30.
The company placed No. 33 in Plastics News' 1997 ranking of North American blow molders.
Since 1992, privately held Pretium has acquired five companies, including Pocono. Additional acquisitions are planned in primary packaging and related business through an aggressive strategy.
``We currently are in negotiations on more than one acquisition,'' Harbison said.
``These will enhance our products, geographic reach and technical depth.''