Tekni-Plex Inc. has strengthened its presence in Japanese barrier-packaging markets through a long-term licensing agreement with Sun A. Kaken Co. Ltd. of Tokyo. Separately, the Somerville, N.J., firm said it will recapitalize to bring in new investors.
Tekni-Plex, a diversified producer of packaging and products for the health, consumer and food industries, will provide Sun A. Kaken with high-barrier film technology and the right to use the Tekni-Plex and Tekni-Films trademarks in Japan.
"We have seen the growing need to serve this market, based on recent experiences with global product launches from the area," Michael Franklin, Tekni-Plex international vice president, said in a news release.
Tekni-Plex has supplied Japan with PVC/Aclar laminates from its U.S. operations, Franklin wrote in an e-mail response to questions. The agreement covers all high-barrier PVC laminations, including PVC/Teklar, and focuses on applications in medical and pharmaceutical markets.
Sun A. Kaken has plants in Shizuoka, Fukuroi, Nara, Ibaraki and Sapporo.
Tekni-Plex also announced that it and its major shareholders have agreed to a restructuring with an estimated recapitalization value of about $875 million.
MST Management LP of New York manages two investment firms that own 54.9 percent of Tekni-Plex. MST Partners LP and MST Offshore Partners CV want to cash out of the plastics firm because their stake in Tekni-Plex "is at the end of their investment cycle," according to a spokesman.
Tekni-Plex would refund the MST companies' investment in Tekni-Plex by issuing new bonds and a new line of credit. The other major investor in Tekni-Plex, Weston Presidio Capital of Boston, could retain its investment of just under 29 percent of the firm in the proposal. Other investors in Tekni-Plex could cash out and new investors could sign up.
Tekni-Plex expects substantially all of its current outstanding debt to be refinanced as part of the recapitalization. The firm and its investors plan to complete the program by the end of June. JP Morgan Securities Inc. is advising on and financing the restructuring
For the year ended July 2, Tekni-Plex had sales of $489.2 million and profit of $15 million. For the six months ended Dec. 31, it had sales of $212.3 million and profit of $3.8 million. Six-month earnings before interest, income taxes, depreciation and amortization were $44.2 million, for a margin of 20.8 percent.
