Sigma Plastics Group has acquired a majority stake in FlexSol Packaging Corp., a four-plant film producer, in a move by Sigma Chairman Alfred Teo to buy back a company he helped found years ago.
A financial restructuring has cut debt levels at FlexSol, according to Teo.
Teo said Sigma Plastics now owns more than 51 percent of FlexSol, based in Pompano Beach, Fla. The other owner is a junior lender to FlexSol, which Teo said does not want to be identified. The junior lender converted more than $30 million of debt into a minority ownership stake, he said.
Teo also has invested some of his own money into the packaging company.
Let's put it this way: We deleveraged the company, he said in a telephone interview.
FlexSol and Sigma Plastics, the giant film and sheet extrusion company based in Lyndhurst, N.J., announced the deal July 7. Terms were not disclosed.
FlexSol employs more than 600 at plants in Pompano Beach, Chicago, Statesville, N.C., and Nashville, Tenn. According to Plastics News data, the company generates $240 million in film sales annually, placing it 34th in the newspaper's most recent ranking of North American film and sheet manufacturers.
FlexSol makes a range of film, including barrier film for food packaging, trash bags and shrink film. Markets include food and beverage, medical/pharmaceutical, printers and laminators, janitorial and industrial packaging.
Sigma Plastics is No. 2 in the Plastics News film and sheet ranking, with $1.57 billion in related sales.
How Sigma and Teo returned to majority ownership of FlexSol requires a short history lesson. In 1985, Teo and Irwin Friedman founded Delta Plastics Corp. Then in 1996, Delta bought a majority interest in Essex Plastics Inc., a Pompano Beach-based film producer.
Finally, in 1999, Teo said, Banc of America Capital Investors acquired majority ownership in Delta and Essex and created FlexSol Holding Corp., which became FlexSol Packaging. Teo retained a 15 percent share of FlexSol and served as chairman of its board of directors for several years.
Now Sigma is back as majority owner. Teo said Banc of America Capital Investors is no longer involved with the company.
FlexSol President Brian Stevenson called Sigma one of the most financially sound leaders in the flexible films industry. The Sigma ownership gives FlexSol a foundation for aggressive growth in coming years.
Teo, who will serve as CEO for the combined companies, said FlexSol is well-managed and on solid ground. He said there are no immediate plans to expand or buy new equipment, but added that Sigma will support future expansion.
Now they're a very financially healthy company, he said.