Bottle blow molder Alpha Packaging Inc. of St. Louis has acquired competitor Quality Container Co. of Ypsilanti, Mich., in a deal that closed Feb. 20.
The purchase expands Alpha's share of the pharmaceutical and nutritional supplement markets. Terms were not disclosed.
The acquired business will operate as Alpha Michigan, said Alpha Chief Executive Officer and President Dave Spence in a Feb. 20 telephone interview.
Alpha already has plants in St. Louis; Bethlehem, Pa.; Salt Lake City; and a newly minted site in Jacksonville, Fla., that began operating with six PET blow molding machines roughly three weeks ago.
Quality Container has a 100,000-square-foot plant in Ypsilanti, where it employs 144 and operates 22 machines that include injection blow molding and continuous shuttle monolayer equipment. Spence said 2007 projects include changing the mix of machinery in Ypsilanti, which will mean adding more injection blow molding and PET equipment.
Management will stay intact, including Chief Operating Officer Rob Salemi, officials said. Quality Container was owned by Comcraft Canada Ltd. of Toronto, a conglomerate that has roughly $2 billion in global assets.
Ken Brooks, senior vice president of Ernst & Young Orenda Corporate Finance Inc. in Montreal, said Alpha and Quality share some of the same customers in the pharmaceutical and nutritional supplements market.
Brooks, who represented Comcraft in the sale, said the firm started prepping the business for sale last year when it closed a Thomasville, Ga., plant and consolidated the business into the Michigan location.
Alpha is strong in custom containers, Brooks said, while Quality is more of a stock container business. Roughly 80 percent of Quality's $18 million in sales is from containers for pharmaceuticals and nutritional supplements. For Alpha, that means the pharmaceutical and nutritional segments now make 55 percent of its total company sales of $83 million.
``Alpha filled a hole in the upper Midwest,'' Brooks said. ``It's a very well-located facility.''
The marriage demonstrates a continued consolidation in blow molded bottle companies, said industry consultant Tim Burns of Cranial Capital Inc. in Solon, Ohio.
The acquisition also highlights the trend of specialized manufacturing, where blow molders are building smaller plants focused on specific markets. For Alpha, its high density polyethylene and PET bottles also go into personal-care and niche food and beverage markets.
``People are saying, `Seek out parts of the market that we can specialize in,''' Burns said. ``Simple is better. The market is changing. There's a lot more differentiation in terms of size and equipment offerings.''