Sealed Air Corp. has acquired shrink film competitor Epsilon Opti Films Corp. for an undisclosed sum.
Sealed Air officials downplayed the acquisition as one of many. One competitor, however, said the move indicates Sealed Air recognizes that its dominant position in packaging film may have been threatened as the young Epsilon and other players such as Intertape Polymers Group Inc. and DuPont have grown.
The purchase was effective April 30, but Sealed Air did not announce the deal publicly.
The Cryovac Division of Sealed Air long has been among the top three polyolefin shrink film producers for retail and food-service end markets. The company also holds the No. 3 position among North American film and sheet producers, according to Plastics News' 2000 ranking. The Epsilon acquisition should strengthen the company's offering of packaging film products, Sealed Air executives said in a letter to former Epsilon customers.
Epsilon was spun off in 1998 from Lyndhurst, N.J.-based Sigma Plastics Group.
``[Sealed Air] sat back a little too long, and Intertape came into the marketplace and has probably ... taken a major share of the business from Cryovac and DuPont,'' said John Powers, executive vice president at AEP Industries Inc. in South Hackensack, N.J. ``For Cryovac, it's nipping Epsilon at the bud vs. letting them become the next Intertape.''
Montreal-based Intertape reported 2000 profit of US$33.4 million on sales of US$654 million.
Sealed Air acquired Epsilon's 80,000-square-foot facility in South Plainfield, N.J., about 100 employees, estimated sales of $10 million and possibly its latest joint venture with shrink film producer Ipel Ltd. Of Liverpool, England. The Sealed Air spokesman declined to comment on the status of the Liverpool plant.
Epsilon's core film products include Opti-92, Opti-95 and Opti-97 biaxially oriented polyolefin shrink films.
``They're getting roughly a new plant with that capacity, but the main thing is, they're really opening a second tier of film [distribution]. That's their big benefit,'' Powers said. ``It gives them a second tier of distribution which they missed and gives them new customer bases.''
AEP of South Hackensack, N.J. reported 1999 sales of $421.8 million.
Publicly held Sealed Air of Saddle Brook, N.J., reported corporate sales of $3.06 billion last year. Its Cryovac Division is based in Duncan, S.C.