Spartech Corp. said it will purchase Alltrista Corp.'s plastic packaging division by the end of the month, allowing Alltrista to focus on its industrial thermoforming operations.
Terms of the deal will not be disclosed until the transaction closes. Alltrista plans to use proceeds from the sale mainly to pay down debt.
``We are enthusiastic about the prospect of adding Alltrista's food packaging operation ... to Spartech's extruded sheet and rollstock segment, increasing this group to 19 production facilities,'' Bradley Buechler, Spartech chairman, president and chief executive officer, said in a news release.
The acquisition will increase Spartech's thin-gauge extrusion capacity and broaden its products and services in the high-barrier, coextruded rollstock markets, Buechler added.
Alltrista's plastic packaging unit had 1998 sales of $28 million. It coextrudes high-barrier sheet and thermoforms containers. Its headquarters and manufacturing operations are in Muncie, Ind., where it employs 75. Spartech said it intends to retain all employees.
``The plastic packaging operation is a niche-oriented packaging company and is not consistent with Alltrista's strategy to grow its plastics business in the industrial thermoforming and injection molding markets,'' Thomas Clark, Alltrista president and CEO, said in a news release. ``Plastic packaging will be a much better fit with Spartech's sheet business, and it can compete in that marketplace more efficiently than as a unit of Alltrista.''
With the deal, Spartech picks up four extrusion lines and seven thermoforming machines at the Muncie plant. In addition, the facility boasts a modern packaging technical laboratory.
``We recently began discussing the possibility of selling this division, which is focused on a niche market,'' Larry Miller, Alltrista vice president of communications and investor relations, said in a telephone interview. ``There were some other companies in talks with us. Spartech just matched the best.''
Alltrista recently acquired Triangle Plastics Inc., making it North America's largest industrial thermoformer. Alltrista, based in Indianapolis, manufactures plastic and metal products. It had 1998 sales of $244 million and employs 2,000 at 16 locations.
Earlier this year, Spartech acquired Lustro Plastics Co. for $10.4 million. Lustro, based in Evanston, Ill., boosted Spartech's market share in glycol-modified PET sheet. Lustro had annual sales of $28 million.
Spartech had film and sheet sales of $432.2 million for the year ended Nov. 1, 1997, placing 12th in Plastics News' 1998 film and sheet ranking. With this year's acquisitions, it is likely to jump one spot to No. 11.
Clayton, Mo.-based Spartech operates three divisions. Spartech Plastics makes up about 62 percent of the company's $654 million in total sales. Within the plastics division, packaging accounts for 17 percent of sales.
Spartech Plastics employs 1,600 and operates about 100 sheet production lines. The firm uses about 500 million pounds of ABS, polystyrene, polyethylene, polycarbonate, acrylic and PET resin annually to make sheet and film for industries ranging from food packaging to appliance, automotive and marine products.
Spartech Polycom, the compounding and color segment, accounts for 30 percent of sales, and the remaining 8 percent falls within Spartech's molded and profile products group.