Specialty paper manufacturer Appleton Papers Inc. is continuing to amass a portfolio in the plastic film market with its purchase of New England Extrusion Inc.
The Appleton, Wis.-based buyer believes the packaging film market to be a growth leader that complements its core paper products, spokesman Bill Van Den Brandt said Jan. 13.
``We used to be exclusively a paper company, but we're moving into other, more diversified areas,'' he said. ``Acquisitions are part of our growth strategy. I'd be surprised if this was the last acquisition we make in the film business.''
In the acquisition, announced Jan. 12, Appleton paid $68 million and assumed some liabilities.
``It very much fits our strategy,'' Van Den Brandt said. ``We think the company can become a valuable supplier to our packaging customers. We now can offer a broader range of film products.''
NEX was founded in 1988 by President Gary Stetson, who plans to retire. The firm has expanded conservatively while remaining relatively small and family-owned. Now NEX joins a company that expects to record close to $1 billion in sales for 2004, Van Den Brandt said.
NEX, which makes polyethylene film for food, medical and industrial uses, opened its second extrusion plant - in Milton, Wis., in 1998 - and added 45,000 square feet of space to its Turner Falls, Mass., headquarters in 2001. Sales have risen from about $35.2 million in 2000 to about $50 million in 2004, according to Plastics News' figures and information from NEX marketing manager Melissa Gardiner.
The company has more than 100 employees and can produce about 60 million pounds of PE film annually, Gardiner said.
NEX runs a mix of monolayer and three-layer lines. The company's custom film is used for such products as coffee, fresh-cut produce, meats, snacks, pet food, personal-care items, lidding and medical devices, Van Den Brandt added.
Appleton hopes to combine some of NEX's offerings with those of American Plastics Co. Inc. of Rhinelander, Wis. Appleton bought American and a sister company, film converter C&H Packaging Co. Inc. of Merrill, Wis., in 2003.
American Plastics also extrudes film for food, but targets higher-barrier products with five to eight layers that provide longer shelf life.
Outside of plastics, Appleton calls itself the world's largest producer of carbonless paper. Appleton's products include thermal paper for computer products, uncoated security paper and coated paper used in design. Its performance film operations represent a small portion of the total company's sales.
The firm is hoping to gain some overlap between coating technologies used for its paper products and film technology for coextrusion applications, Van Den Brandt said.
Appleton is one of the largest employee-owned companies in the United States, said Thomas Blaige, chief executive officer of Chicago-based investment banking firm Thomas Blaige & Co. LLC. In 2001, employees invested $107 million from their retirement funds to buy Appleton from Paris-based ArjoWiggins SAS.
