A major restructuring at Atlanta-based Diversapack LLC will usher out one partner and bring in a new interest at the minority-owned flexible packaging supplier.
The company announced Sept. 12 it will get additional capital and debt financing through a deal with the Kristel family of Deer Park, N.Y., founders of Commercial Envelope Manufacturing Co. Inc. Terms of the agreement were not disclosed.
The Kristels — who in 2007 sold their family business to Cenveo Inc. of Stamford, Conn. — will assume the 49 percent ownership in Diversapack formerly held by Printpack Inc. of Atlanta, said Woodrow Hall, Diversapack president and chief executive officer, in a telephone interview. Hall owns the other 51 percent of the venture.
``We will be spending $17 million to $20 million over the next two years in capital investments,'' Hall said. He did not say why Printpack divested its share of Diversapack. ``It's been fruitful,'' he said of the partnership.
Printpack, whose clients include Eastman Kodak Co. and Coca-Cola Co., is a $1.3 billion business.
``Our focus has changed since our initial involvement with [Diversapack], so it is the right time for us to divest our position,'' said Dennis Love, president and chief executive officer, in a statement. Love was unavailable for further comment.
Hall formed Diversapack in 2002, with Printpack's backing, out of his Film Fabricators Inc. business in Norcross, Ga. Diversapack has factories in Cincinnati and Batavia, Ohio; Marengo, Ill.; and Orland, Ind. Diversapack's annual sales are about $70 million and employs about 400.
Film Fabricators was part of Procter & Gamble Co.'s minority supplier development program and Diversapack continues to serve the consumer products, food and beverage, personal-care, military and industrial markets. Customers include P&G and the William Wrigley Jr. Co.
Hall said capital expenditures at Diversapack will include new machinery and facilities enhancements to add blending, compounding, pouching, extrusion and laminating capacity.
In a news release, Alan Kristel, president of Cenveo's Commercial Envelope division, said since the sale to Cenveo, his family had been seeking another manufacturing investment. Kristel said Andrew Young, former U.N. ambassador, congressman and Atlanta mayor, introduced Hall to the family.
``We look forward to rolling up our sleeves and taking this business to the next level,'' Kristel said.