BWay Holding Co. wants to grow through acquiring rigid plastic container companies once it goes public.
The Atlanta-based firm, which plans an initial public offering, said in a preliminary prospectus that the rigid plastic container sector is highly fragmented and that BWay intends ``to pursue further consolidation opportunities'' in the market.
BWay is no stranger to acquisitions. Since 2003, it has swallowed four large plastic and metal container firms that nearly doubled its sales to $968.9 million for its fiscal year ended Oct. 1. Plastics accounted for about 42 percent of that total business.
BWay filed March 9 for an IPO, hoping to raise as much as $230 million. It did not specify either a specific date for the offering or a targeted share price.
BWay is controlled by private equity firm Kelso & Co. of New York, which took the company private in 2003. BWay itself would not receive an infusion of funds from the IPO - Kelso and other stockholders will sell shares and receive the funds, the prospectus said.
In plastics, BWay makes injection molded pails, and blow molded tight-head containers, bottles and drums to package petroleum products, pharmaceuticals, agricultural chemicals, paint, ink, edible oils, adhesives and driveway sealants. In the prospectus it estimates that North American markets for its plastic products were worth about $2.2 billion last year, when demand grew 3.5 percent.
BWay also estimated it is the No. 1 player in plastic pails, with a 27 percent market share in the U.S. In blow molded tight-head containers it claims 67 percent of the U.S. market, and 85 percent of the paint bottle market.
The company also claims to hold dominant or significant shares in markets for a variety of metal drums, pails, containers and paint and aerosol cans.
BWay operates 22 plants in North America, including 10 that process plastics.
The company entered plastics in 2003 when it bought SST Industries Inc., picking up SST's Loveland, Ohio, blow and injection molding plant in the deal. A year later it acquired North America Packaging Corp., which added five more blow and injection molding plants.
BWay added injection molding facilities again last year and expanded its geographic base into Canada when it purchased Industrial Containers Ltd. of Toronto.
Plastic pails represent 32 percent of BWay's sales, its single biggest product line. Blow molded tight-head containers account for 5 percent of sales, while other plastics containers are smaller businesses.
The company sells to various industries but is prominent in the paint can market, where it counts Sherwin-Williams as its largest customer, representing 14 percent of sales.
BWay purposely avoids the highly competitive food and beverage packaging market, made up of relatively few and large customers, the company said in its prospectus.
Goldman, Sachs & Co. and Banc of America Securities LLC are lead underwriters for the IPO.