A Portola Packaging Inc. subsidiary has purchased certain operating assets of Consumer Cap Corp. in exchange for assuming some Consumer debts. Terms were not disclosed.
Also, Consumer agreed to a consent decree, admitting it infringed on certain patents of Portola's on tamper-evident plastic closures.
The actions conclude acrimonious years of legal and market skirmishing between market-dominant Portola of San Jose, Calif., and 1995 start-up Consumer of New Castle, Pa. The deal was announced Jan. 16 with a Jan. 1 effective date.
"The purchase of these assets will allow Portola to resolve, to our satisfaction, ongoing patent litigation and ease the concerns some customers may have had regarding Consumer's financial condition," said James Taylor, Portola president and chief operating officer.
Industry veteran Robert Crisci was named chief executive officer of Portola subsidiary Northern Engineering and Plastics Corp., which will manage Consumer's product line and operations in New Castle and Phoenix.
The sites employ about 75 and operate 13 injection molding machines, Taylor said in a telephone interview.
Luca Molinaro started Consumer Cap in the early 1990s. The Italian immigrant learned the tool and die trade and developed patents and a mold-making business. He assigned the rights to eight of his patents to a company that Portola acquired later.
Portola did not need Molinaro's tooling expertise, so he proceeded to patent other plastic-cap technology, to go into the molding business and sue Portola for antitrust practices. Portola counter-sued for patent infringement. All pending litigation between the parties will cease.
Consumer said in April that it had annual sales of more than $10 million. Principally, Consumer makes plastic caps and closures for dairy and beverage bottlers.
Molinaro, who was Consumer CEO through December, boosted the firm's management ranks in April, adding a COO and a chief financial officer. Neither remains with the company.
Molinaro continues to operate Molinaro Tool & Die in New Castle.
Portola operates 12 plants in California, Illinois, New York, Pennsylvania, Tennessee, South Carolina, Canada, Mexico and England and has a variety of joint ventures.
The firm molds plastic closures for use on dairy, fruit juice, bottled water, sports drink, institutional food and noncarbonated beverage products.
Also, Portola blow molds 5-gallon PET and polycarbonate water bottles and makes capping equipment, capping and filling systems and tooling and molds for blow molding.
Portola reported a loss of $3.7 million on sales of $203 million for the fiscal year ended Aug. 31.