Bottle and closures molder Captive Plastics Inc. has been purchased by equity firm First Atlantic Capital Ltd., in a deal Captive hopes will spur aggressive growth on a level similar to that of a former First Atlantic property.
The New York-based equity firm owned Berry Plastics Corp. for a dozen years before selling it in 2002. In that time, Berry made 15 acquisitions and grew annual sales from about $55 million to $494 million, First Atlantic Chairman and Chief Executive Officer Roberto Buaron said July 23.
Captive, a family-owned company, considered several equity firms as a potential buyer, said senior Vice President Peter Martin. But First Atlantic's experience firmed the deal, he said.
``We decided on First Atlantic, in large part because of Berry and because First Atlantic's history in the plastics and packaging world fit our needs best of all,'' Martin said. ``The marriage of thoughts and strategies will make our growth that much quicker.''
The sale of Piscataway, N.J.-based Captive Plastics was completed July 22 for undisclosed terms. According to industry sources familiar with the deal, First Atlantic paid $100 million for Captive, a company with 550 employees and seven injection and blow molding plants in the United States.
Captive's top officials, including current Chairman and CEO John Raymonds Jr., will retain a substantial stake in the company, Buaron said. Raymonds' father, John, started the company in 1969 and ran it until his death in 1993.
The younger Raymonds will continue to serve on the board of directors. Captive President and Chief Operating Officer John Dezio has been named new CEO.
Dezio and Martin joined Captive Plastics nine years ago. The two had worked together at Continental Can Co. and brought a large-company attitude to privately held Captive Plastics, Dezio said in a July 23 telephone interview. Captive became more acquisitive and moved further outside the East Coast.
``We came in with a much different mind-set in the mid-1990s and changed the company,'' Dezio said. ``John Raymonds allowed us to invest in it, all for positive reasons. Nine years ago, we were less than half the size we are now.''
Captive bought injection and blow molder Thoroughbred Plastics Corp. of Jeffersontown, Ky., in 1998 and Phoenix-based blow molder Star Container Co. in 2001. Captive Plastics recorded about $100 million in sales last year, Dezio said.
First Atlantic will place Captive Plastics into a $400 million fund that includes six other companies. Those holdings include paper protective packaging producer Ranpak Corp. of Concord Township, Ohio, near Cleveland.
First Atlantic likes to generate quick returns on its investments, retaining companies in its portfolio for an average of five years, Buaron said. In Captive, the equity firm saw an opportunity with a company that had management eager for growth, he said.
``We found very strong operations and a good strategic position in various product lines,'' Buaron said. ``We were entirely comfortable that we could expand this company. Our plan is to try to put together a similar effort as the one we did for Berry.''
Captive operates in specialty areas where profit margins are higher - such as hair-care products and wide-mouth PET bottles for retail club stores - and shies away from commodity products, said Joseph Levy, First Atlantic managing director.
New acquisitions will keep that focus, Levy said.
``We're not going to compete with Amcor in PET water bottles, but we'll be in niches where we can be a strong competitor,'' he said.
``Size in itself is not the answer,'' he said. ``Acquisitions need to be intelligently put together and assimilated with the rest of the business.''
The sale does not include PET Power, a PET blow molding company in Etten-Leur, the Netherlands, Dezio said. That business had a technical agreement with Captive Plastics, but was spun off as a separate company, he said. Members of the Raymonds family will continue to invest in the Dutch company, he said.
Captive ranked 31st on Plastics News' listing of North American blow molders in 2002 with $71 million in relevant sales. Another $17.2 million came from its injection molded closures operations, according to that ranking.