Sheet extruder Spartech Corp. of Clayton, Mo., has acquired packaging maker Creative Forming Inc., a move officials said will serve as a platform for Spartech in vertically integrated packaging operations.
Spartech paid $61 million, which will be financed through its bank credit facility and operating cash flows. The deal is expected to close Sept. 14.
``This is a perfect fit, and I think there's a lot of benefit for Creative Forming in the material expertise arena,'' said John Hart, vice president with P&M Corporate Finance LLC in Detroit. P&M represented Spartech in the transaction. ``Spartech brings material expertise; Creative Forming has the design and engineering expertise,'' Hart said in a telephone interview.
Creative Forming is based in Ripon, Wis., in a 160,0000-square-foot facility where it extrudes polypropylene, recycled PET and PET to support its thermoforming packaging operations, said Glen Yurjevich, Creative's president and chief executive officer, in a Sept. 6 telephone interview.
Creative employs 185. With its Alphatec Extrusion division, Creative Forming supplies its own thermoforming operations to make packaging for end markets including food and consumer products. Its annual sales are roughly $48 million.
``We will be a platform for Spartech's development of it as a packaging company,'' said Yurjevich. ``From Creative's standpoint, we're very excited to be a part of Spartech.''
Creative in 2001 was acquired by private equity firm Mason Wells of Milwaukee. Officials there would not comment on the transaction until it is officially closed.
Spartech interim Chief Executive Officer Randy Martin said Creative Forming will provide the catalyst to focus several of Spartech's operations on developing new business and increasing its services to the packaging market.
``Over the past eight years, we have successfully developed our packaging capabilities in food and consumer containers,'' Martin said. ``Through the development of multilayer barrier and shelf-stable packaging, we have consistently grown our sales in this market.''
In addition to strong design and engineering know-how, Martin said, Creative has an excellent management team and skilled workforce. The company's products also help support Spartech's green initiatives.
Spartech will combine the Ripon facility with the efforts of five existing Spartech facilities to form a packaging technologies business that will report to David Gorenc, vice president of Spartech packaging technologies, Martin said.
According to Spartech's 2006 annual report, the packaging segment made up 23 percent of its $1.48 billion in sales that year.