Thermoformer Pactiv Corp. is growing again through acquisition, buying one of its competitors in the production of amorphous PET for food-service packaging.
Lake Forest, Ill.-based Pactiv said Feb. 23 it will acquire PWP Industries of Vernon, Calif., in a $200 million deal that's expected to close by the end of the first quarter of this year.
“This acquisition represents an opportunity for Pactiv to expand our position in APET, which is a fast-growing material in the food-service market due to its outstanding functionality, particularly its freezing capability, as well as its recyclability,” Richard Wambold, Pactiv's chairman and CEO, said in a news release.
The deal allows Pactiv to enter a multiyear contract under which Coca-Cola Recycling LLC will supply bottles to PWP to make post-consumer recycled PET containers, Wambold added.
PWP officials were not immediately available for comment.
PWP was founded in 1998 and in 2001 became part of HPC Industries LLC of Los Angeles. PWP has APET manufacturing plants in Vernon; Abilene, Texas; and Mineral Wells, W.Va. The Mineral Wells facility also produces polypropylene. PWP also has an 80,000-square-foot facility that recycles post-consumer PET in Davisville, W.Va., receiving material from Atlanta-based beverage manufacturer Coca-Cola Co.
PWP employs about 600. It ranked No. 11 on Plastics News' recent survey of North American thermoformers.
Pactiv ranked No. 1 in the same survey, with total sales of $3.36 billion, and thermoforming sales of $1.93 billion.
In its latest earnings statement, Pactiv said for full-year 2009, profit on total sales was $308 million, compared with profit of $220 million on sales of $3.57 billion in 2008, which officials credited to restructuring and volume growth.
Spokesman Matthew Gonring said the PWP acquisition is in line with Pactiv's growth plan: “There are the obvious and tangible operations business synergies. [PWP has] the recycling center with Coca-Cola Recycling, which obviously is important to us. We view the big customers as very important to our business, both from a consumer and from a food-service standpoint, and [PWP has] got relationships there too.”
Tim Burns, a research analyst with Cranial Capital Inc. in Solon, Ohio, called the acquisition “typical Pactiv,” a move designed to bolster its presence in cold-channel retail and food-service packaging, with the added bonus of a state-of-the-art recycling plant.
“It's typical Wambold: He doesn't go out and do double-the–size-of-the-company acquisitions. He's always said there's so much to do in North America — both on the consumer side and on the food-service side,” Burns said.
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