Crown Holdings Inc. has lined up a buyer for its plastic closures business, the Philadelphia-based firm announced Aug. 18. The announcement puts to rest industry speculation that a sale was imminent.
Private equity firm PAI Partners of Paris agreed to pay about $750 million for the business. Crown said its closure sales were $676 million last year, with 76 percent of that occurring in Europe. Not included in the sale were other Crown plastics operations in beauty care, cosmetics and drink cups.
``It's a logical conclusion,'' said packaging analyst Tim Burns, with Cranial Capital Inc. of Solon, Ohio. PAI's investments are in Europe, where most of the 29 Crown closure plants are located. From Crown's point of view, the sale will help it meet internal cash demands and return to its former strength as a low-cost producer of metal products, Burns said.
Crown's global closures business has 3,500 employees and facilities in 15 countries in Europe, Asia and the United States. Five of the plants are in the United States, said senior finance Vice President Timothy Donahue. Its customer base comprises personal-care, food, beverage, pharmaceutical and industrial markets.
``These are good assets that in the right hands can do better,'' Burns added. He expects PAI will hold onto them for several years and then sell them to an industry player that can combine them with other packaging assets to create a bigger closures entity.
No PAI official familiar with the agreement was available to comment. On its Web site PAI claims to have wide experience in packaging. Among its investments are consumer products firms Yoplait, United Biscuits, pet food firm Royal Canin, Saupiquet, a supplier of ready-to-eat meals, and pharmaceuticals firms Ipsen and Cepa.
Crown expects to complete the sale this year. About three-quarters of the sale price, which includes certain liabilities, will be paid in euros.