Protective packaging supplier Tuscarora Inc. will purchase regional competitor Packaging Resources Colorado LLC and reconfigure operations at some of its plants.
Tuscarora, a wholly owned subsidiary of Swedish company Svenska Cellulosa Aktiebolaget, will pay an undisclosed amount for Packaging Resources, a maker of custom protective packaging. Packaging Resources recorded about $8 million in 2001 sales and has plants at its headquarters in Longmont, Colo., and in Fort Collins, Colo.
Tuscarora will close the Fort Collins plant and one of two Tuscarora plants in Colorado Springs, Colo., within 90 days after the sale is completed, said David O'Leary, Tuscarora president and chief executive officer. The sale is scheduled to close by Aug. 30.
Two foam molding machines at the small Fort Collins facility will be shifted to the remaining Tuscarora plant in Colorado Springs, he said. Tuscarora's integrated materials plant in Colorado Springs will be shuttered and work will shift to Packaging Resources' Longmont facility.
Tuscarora's design and testing center and regional sales office also will move from Colorado Springs to Longmont, O'Leary said in an Aug. 19 telephone interview.
About 35 people are affected by the moves. Most of them will be offered jobs either in the Longmont or Colorado Springs molding facilities, where Tuscarora plans additional hiring, O'Leary said.
``[Packaging Resources] is a company that does a great job in fabricating packaging and molded foams,'' O'Leary said. ``Much of it runs parallel and complementary to our product line. But it gives us better geographic coverage and some capabilities that are more extensive than what we have.''
Packaging Resources claims to serve more than 250 customers along Colorado's front range, an area running north and south of Denver. The company molds and fabricates polyethylene foam, loose-fill corrugated sheets and wood, primarily for the medical and electronics industries.
The company is strong in exterior protective packaging, or the actual foam box surrounding a product, O'Leary said. Tuscarora, based in New Brighton, Pa., has specialized in the interior of the box, he said. Tuscarora purchased the Colorado packager from a group of investors, O'Leary said. Packaging Resources was founded in 1976 and employs about 55.
The acquisition continues a recent string of purchases, mainly of small and midsize companies, by Tuscarora since its acquisition by SCA in 2000. Since then the company has bought the assets of Marko Foam Products Inc., Polyfoam Packers Corp. and Insulated Shipping Containers Inc., among others.
Tuscarora expects to record about $300 million in sales in 2002, O'Leary said. Including recent acquisitions, sales have grown by about 20 percent this year, although those figures are flat when the purchases are subtracted, he said.
Stockholm, Sweden-based SCA, a global maker of packaging and paper products, is still in the market for acquisitions and might look at some larger companies, O'Leary said. ``They are encouraging us to raise our expectations a little bit,'' O'Leary said.