Packaging maker Captive Plastics Inc.'s acquisition of Spentech Plastic Containers Inc., which blow molds personal-care and other products in Richmond, Va., gives Captive a presence in the southeastern United States - and more deals could be coming.
``We will continue to look for strategic acquisitions in the market categories that we're in,'' said Peter Martin, Captive's president and chief operating officer.
Despite a string of merger and acquisition activity in packaging, he said rigid packaging ``is still a relatively fragmented industry.''
The bottle and closures molder has the financial resources to buy more packaging companies. A year ago, Captive was purchased by First Atlantic Capital - the same New York equity firm that bulked up Berry Plastics Corp. with 15 acquisitions over a dozen years of ownership, before selling Berry in 2002.
Captive announced Aug. 22 that it bought Spentech from Stephen Spence, who founded the company in 1992.
Before picking up Spentech, Captive Plastics of Piscataway, N.J., ran seven plants across the country, including two in New Jersey, but it had none in the Southeast.
Terms were not disclosed. Martin said a number of strategic buyers, from within the packaging industry, expressed interest in Spentech, which was bid out through an auction process.
Spentech generates sales of about $30 million a year from blow molded bottles and jars for cosmetics, personal-care items, pharmaceuticals, automotive products and household chemicals, using polyethylene, polypropylene, PVC and PET. The company does mainly extrusion blow molding and decorating and some stretch blow molding.
About 200 people work at Spentech's two factories in Richmond.
Martin said the combined companies should generate around $150 million in sales from nine plants.
Captive does blow molding and injection molding. Its markets are personal care, health care, food and beverage.
``The acquisition of Spentech fits perfectly with our growth strategy to produce bottle and closure packaging solutions, which offer our customers one-stop shopping,'' said John Dezio, Captive Plastics' chief executive officer.
Dezio and Martin, who had worked together at Continental Can Co., joined Captive Plastics 10 years ago. Then family-owned Captive got more aggressive and made two acquisitions - Thoroughbred Plastics Corp., a specialist in PET bottles for distilled spirits, in 1997, and Star Container Co., a maker of wide-mouth PET containers, in 2001.
Both of those deals happened before First Atlantic came into the picture.
``The sale to First Atlantic was to accelerate and provide financial structure and do what we were doing before,'' Martin said.
Ernst & Young Corporate Finance Inc. was the financial adviser to Spentech. Captive worked with legal adviser Graham, Curtin & Sheridan.