SCA Packaging North America has been sold to a private equity group for $400 million in cash.
Paper and packaging firm Svenska Cellulosa Aktiebolaget of Stockholm, Sweden, divested the operation to Metalmark Capital LLC of New York. SCA Packaging's thermoforming unit, SCA Consumer Packaging Inc. of De Kalb, Ill., includes the former Tuscarora Inc. and Alloyd Co. Inc.
In a recent conference call, Jan Aström, chief executive officer of the parent company, said his firm is making divestitures and acquisitions so it can focus on areas with greater growth opportunities.
``Since SCA entered in 2001, SCA Packaging North America has met the required rate of return,'' Aström said. ``Migration of customers to Asia, in connection with high competition for targeted acquisitions, forced SCA in 2002 and 2003 to restructure the business and expand into adjacent segments.''
SCA will focus on Eastern Europe, Russia and China particularly, and other Asian countries, he added.
``From a financial point of view, we feel we have gotten a fair return'' from the division, he said.
The purchase price of $400 million represents a multiple of 7.7 times earnings before interest, taxes depreciation and amortization, based on the North American unit's estimated earnings in 2006.
Lisa Daniels, spokeswoman for SCA Packaging North America, said by telephone Feb. 1 that it is too early too tell what changes Metalmark will make, although a name change is likely.
A Metalmark official did not return calls. Metalmark's other investments include stakes in plastic container maker Silgan Holdings Inc. of Stamford, Conn., and Smurfit-Stone Container Corp. of Chicago.
According to Plastics News' most recent thermoforming ranking, SCA Consumer Packaging Inc. had 2006 thermoforming sales of $91.5 million with 600 employees. The unit operates thermoforming plants in De Kalb; Branford, Conn.; Spartanburg, S.C.; Juncos, Puerto Rico; Tijuana, Mexico; and Nogales, Mexico.
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Holdings included in SCA's deal
SCA began an acquisition spree stateside in 2001, when it bought specialty packaging producer Tuscarora Inc. of New Brighton, Pa., and Insulated Shipping Containers Inc. of Phoenix, which made polyurethane foam-based packaging for biopharmaceuticals, blood components and diagnostic samples.
In 2002, SCA nabbed thermoformer Alloyd Co. Inc. of De Kalb, Ill. At that time, Alloyd had carved a large niche in display-friendly, transparent enclosures for consumer products.
In 2004, Alloyd/SCA Packaging bought the assets of Progressive Plastics Inc., a thermoformer then based in Ontario, Calif.
SCA Packaging North America had total 2006 sales of $430 million, and has 2,100 employees.
