Rigid metal and plastic containers maker BWay Corp. has acquired Chicago-based Central Can Co. in a $26.4 million deal that expands BWay's product portfolio in hybrid cans as it continues its quest to grow via acquisition.
The Atlanta-based firm outlined its plans to acquire rigid metal and plastic container companies a sector that is highly fragmented when it went public in 2007.
The addition of Central Can gives BWay about $68 million in new annual sales and a larger presence in the hybrid and all-plastic paint can market. Central Can employs about 180.
In the fourth quarter, BWay officials will shutter one of the firm's 10 metal manufacturing facilities and rationalize that capacity into Central Can's sole plant in Chicago, where the company has plastic and metalworking operations. BWay officials declined to identify which plant will close. Prior to the acquisition, BWay operated 20 plants in North America, half of which were plastics manufacturing facilities.
The company makes injection and blow molded polyethylene and polypropylene containers. About 42 percent of BWay's sales are in plastics.
BWay has a two-path growth strategy focused on organic initiative and add-on acquisitions. The organic growth will most likely come from new product development on the plastics side of the business and from cross selling between metal and plastics segment customers, said Jeffrey O'Connell, BWay's vice president and treasurer, in an Aug. 28 telephone interview.
On the acquisition side, we will evaluate add-on acquisitions that are within our means and within our core markets, O'Connell said.
BWay will continue its focus on its core market of paint and chemicals containers and stay out of the food and beverage packaging industry. BWay claims to be the No. 1 producer of plastic pails and the only container maker that is a leader in both metal and plastics.
In plastics, BWay makes injection molded pails and blow molded tight-head containers, bottles and drums for packaging petroleum products, pharmaceuticals, agricultural chemicals, paint, ink, edible oils, adhesives and driveway sealants.
BWay has a 29 percent market share in plastics pails in the United States and a 67 percent U.S. market share in blow molded tight-head containers, as well as 85 percent of the paint bottle market. Cleveland-based paint and chemicals maker Sherwin-Williams Co. is its largest customer.
BWay entered plastics in 2003 when it bought SST Industries Inc., picking up SST's Loveland, Ohio, blow and injection molding plant. A year later it acquired North America Packaging Corp., which added 10 more blow and injection molded plants.
BWay added injection molding facilities in 2006 and expanded its geographic base to Canada when it bought Industrial Containers Ltd. in Toronto.
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