At DuPont, the decision boils down to a focus on faster-growing business segments. For Bemis, the acquisition will help the Minneapolis company rise in a specialized corner of the film market, where consolidation has become the norm.
Bemis is North America's largest producer of film and sheet products, according to Plastics News' most recent ranking, and DuPont is North America's second-largest film and sheet maker.
The deal, set to close by early August, includes two plants with expected combined sales of about $100 million in 2002.
Lehman Bros. estimates the sale price at about $125 million, while other consultants put the potential figure closer to $80 million.
Neither DuPont nor Bemis would disclose the actual price.
The purchase - the largest for Bemis in close to two years, but a relatively small deal for resin and chemicals giant DuPont - immediately makes Bemis a key player in the industrial shrink film market, said Bemis spokeswoman Melanie Miller.
That demanding market for oriented, blown shrink film includes products that must have high clarity, and anti-fogging and barrier protection.
Only a handful of companies, including polyolefin shrink film competitor Cryovac, a division of Sealed Air Corp. of Saddle Brook, N.J., make those products, Miller said.
``We're one of three or four companies with any size in that market,'' she said. ``The patented technology means there are very few players in the industry.''
Wilmington, Del.-based DuPont decided to exit the shrink film business to focus on film segments in the food area, where DuPont is prominently positioned, said Craig Binetti, president of DuPont Packaging and Industrial Polymers.
The sale of the venerable Clysar brand caught many in the industry by surprise. DuPont has owned Clysar for 39 years. The business employs about 450 at plants in Clinton, Iowa, and Le Trait, France. Both sites were expanded during the 1990s.
DuPont would rather invest in new products and high-performance materials that can advance existing technology, Binetti said. The company has more than 300 new products in the pipeline for its other packaging and industrial polymer brands, he added.
``The shrink film business is in a different segment, in display and protective packaging, where we've had slower growth and don't have as strong a market or technology position,'' Binetti said in a June 19 telephone interview. ``We have a number of other areas with a tremendous opportunity for growth.''
The Clysar assets are a better fit for Bemis, said Lehman analyst Ghansham Panjabi in New York. Panjabi, who follows publicly held Bemis, said Clysar is one level down from Bemis' existing, higher-end shrink film used mainly to package fresh grocery-store meats. The Clysar film is both thin-gauge and unprinted, qualities unlike Bemis' existing shrink business.
Clysar includes linear low density polyethylene and polypropylene film for such items as fresh pizza on store shelves, overwraps for toys and games, and shrink wrap for compact discs.
``Bemis invested in the technology, and they were willing to pay for it,'' Panjabi said.
``This film is not as simple as commodity film. And Bemis suddenly has a more significant international presence in Europe, both in manufacturing and distribution.''
Bemis plans to add the Clysar business to its high-barrier product line, an area accounting for about half of the firm's sales, Miller said. The company recorded $2.29 billion in 2001 sales.
``It's an opportunity for us to take some of this oriented film technology and use it with other high-barrier products coming out,'' Miller said.
The company also plans to use Clysar's outside distribution channels globally, a change for a firm accustomed to an in-house sales staff, Miller said.
The Clysar acquisition adds to Bemis' last major purchase, the shrink film operations of Viskase Cos. Inc. in October 2000. That acquisition handed Bemis its four shrink film plants.
The company said at the time that it expected that business to increase sales by $150 million to $160 million.
Sealed Air adopted the same consolidation path in April 2001 with its purchase of polyolefin shrink film maker Epsilon Opti Films Corp.
While Bemis expands its reach in shrink film, DuPont plans to focus on high-performance films for such areas as case-ready meats, laminated glass for architectural windows and even lighter-weight golf balls, Binetti said.
The company also will look for acquisitions with complementary technology, geographic expansion or add-on products, he said.
``Acquisitions play a key part'' in the firm's growth strategy, Binetti said. ``But it won't be in shrink film.''