DuPont Canada Inc. plans to become a bigger player in liquid-food packaging systems by acquiring Liqui-Box Corp. of Worthington, Ohio.
DuPont Canada plans a cash purchase worth US$333 million, the firm announced March 26. DuPont Canada will combine its Enhance Packaging Technologies Inc. subsidiary with Liqui-Box to create a C$400 million (US$250.8 million) per-year company, which it will operate under the Liqui-Box name.
Dave Colcleugh, DuPont Canada chairman, president and chief executive officer, said Liqui-Box fits all three of his company's business thrusts in food, security and polymers. Food-packaging systems continue to be fast-growing in both developed and developing countries.
Liqui-Box supplies dispensing systems for liquids and other flowable products to dairy, processed-food, wine, beverage, water and pharmaceutical industries. Liqui-Box makes rigid blow molded containers, bag-in-box containers, pouch containers and customized filling systems.
The business complements and expands DuPont Canada's Enhance subsidiary. Enhance supplies plastic films and form-and-fill packaging machinery to food and beverage industries, film converters and industrial customers. Its films production plant is in Whitby, Ontario, near Toronto.
The new DuPont Canada subsidiary will be able to supply turnkey systems for liquid packaging of beverages, dairy products and pumpable foods to retail and institutional customers around the world, said Ash Sahi, Enhance president and CEO. He will head up the merged Liqui-Box business.
DuPont Canada plans to continue operations at all nine of Liqui-Box's U.S. plants and at facilities in the United Kingdom and India. Liqui-Box's North American blow molding-related sales were an estimated $54 million in 2000 from the output of six U.S. plants.
Enhance's Whitby film plant will remain in production. Some of Whitby's production could be integrated with Liqui-Box's film needs, according to officials. Of special interest are nylon films and multilayer aseptic constructions, which Liqui-Box does not make. Each business extrudes polyethylene films designed to run on its respective filling systems.
Enhance is the dominant supplier of PE milk pouches in Canada and has developed aseptic packaging that can keep foods fresh for a year without refrigeration. About 10 months ago it bought Prepac, a Paris firm that makes form-and-fill equipment, allowing Enhance to offer complete packaging systems.
Liqui-Box had sales of $145.2 million and profit of $13.5 million last year. The company is debt-free. Examples of its products include flexible packaging for soft drink syrups and bulk condiments for restaurants, fast-food chains and institutions.
DuPont said it expects to complete the purchase in May or June. The purchase price includes funds for Liqui-Box share options. The $67 per-share offer was a 34 percent premium above Liqui-Box's share price on Nasdaq before the offer announcement. The firm's share price shot up to $66.55 after the announcement.
Officials said DuPont Canada and Liqui-Box had been negotiating the deal for more than a year after the Mississauga, Ontario, company approached Liqui-Box. Liqui-Box Chairman Samuel Davis said the deal will be good for shareholders, employees and customers. He and his son control about 38 percent of voting shares and have approved the purchase.
