Linpac Group Ltd. has said there is no formal sale process currently under way following speculation that the global rigid packaging company could be split up and sold off by the banks that control it.
In a statement, the Knottingley, England-based company said: Bank of America Merrill Lynch has been retained as adviser to the company and is undertaking a review of the group to determine the most appropriate value-realization strategy.
A syndicate of banks took over ownership of Linpac Group from Montagu Private Equity in a debt-restructuring process in January. Under that deal, the banks forgave half of the company's debt and injected additional cash.
Linpac has now confirmed the banking syndicate will not be a long-term owner of the business and is looking for potential exit choices. But it stresses that no immediate action has been decided upon.
In the statement, Linpac also said: Importantly, the mandate given to Bank of America Merrill Lynch emphasizes that the clear objective is value maximization, not urgency, and no formal sale process is currently under way.
The shareholders have invested additional cash in the business, which demonstrates their belief in its inherent strength, and the business is now capitalized in such a way that the management team has sufficient financial headroom and time, therefore, to maximize value.
As far as the operations are concerned, it is and has been business as usual. Financial performance remains in line with expectations following a satisfactory operational performance in 2009. In conclusion, Linpac is a company with an enviable customer base, multiple market-leading positions, a highly dedicated and committed workforce and a great future.
Linpac will communicate with interested parties as and when there is new information to report.
Linpac has not revealed if any approaches have been made by interested parties. But sources close to the situation told PRW that potential buyers have enquired about parts of the company.
A break-up of the group would be a massive turnaround after more than 50 years of growth, in which Linpac has become one of the largest plastics packaging producers in the United Kingdom, but also a significant player around the world.
European Plastics News, in a special data report this month, places Linpac as the 12th-largest producer of rigid packaging in Europe, with estimated sales of 250 million euros ($339.2 million) in that region. But global sales for the group as a whole are 1.3 billion euros ($1.76 billion), due to its many businesses in flexible films and returnable packaging, as well as rigid packaging, in Europe, North America and the Asia-Pacific region.
Linpac Group has 49 manufacturing sites in 29 countries. There are four divisions, reflecting the string of acquisitions it has made in the past: Linpac Packaging, Linpac Allibert, Linpac Ropak and Linpac Viscount.
Linpac Packaging is the largest division, making up 47 percent of the group, with sites in 19 countries. The division includes some film extrusion production, such as the Filmco business in North America.
Linpac Allibert makes returnable transit packaging for retail supply chains. Included in this division is the group's recycling business and business units such as Linpac Allibert Medical and Linpac Environmental, which does rotational molding of outdoor furniture and recycling bins.
Linpac Ropak is North America's largest manufacturer of rigid plastic containers for industrial and consumer applications, according to the company.
Linpac Viscount, representing 10 percent of the group, supplies rotational molding, industrial packaging and materials-handling products from 15 locations in Australia, New Zealand and the Asia-Pacific area.
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