Private equity firm Irving Place Capital plans to acquire blow molder Alpha Packaging Inc., with the transaction expected to close in September.
Terms of the deal were not disclosed but, citing industry sources, the St. Louis Business Journal reported Aug. 31 that the selling price is $260 million.
St. Louis-based Alpha manufactures plastic bottles and jars at plants in St. Louis; Salt Lake City; Bethlehem, Pa.; Jacksonville, Fla.; and Ypsilanti, Mich. The firm also has a warehouse in Carson, Calif. The company in April opened its first European plant, in Roosendaal, Netherlands.
Alpha's Technigraph division, based in Winona, Minn., provides high-end container decorating services to several leading personal-care brands.
IPC is buying Alpha from private equity firm Stonebridge Partners of White Plains, N.Y., which acquired the company in 2005. Stonebridge made capital investments that allowed Alpha to nearly triple in size during the period, growing its annual sales from about $50 million to a projected $135 million for 2010, Alpha President Dave Spence said in an Aug. 31 telephone interview.
We're a pretty resilient company. We're hard-working. When all the stuff was hitting the fan in late '08 and '09, we hustled, he said. We kept our business strong. We were able to withstand the downturn and now we're looking forward to the next chapter.
Spence was 26 when he bought Alpha then called Alpha Con Plastics in 1985. As part of the IPC deal, he will remain with the company as president and CEO.
Under the purchase agreement, Alpha Chief Operating Officer Dan Creston will oversee all acquisition integration with a new title, that of executive vice president of corporate development. Mike DeFazio, who currently serves as Alpha's vice president of operations, will become chief operating officer. Other senior managers will stay in place.
The deal is one of a string of plastics packaging purchases for IPC.
Most recently, on Aug. 6, IPC finalized its purchase of Mold-Rite Plastics Inc., a Plattsburgh, N.Y., molder of caps, child-resistant closures, vials and jars.
As part of that deal, Phil Yates joined Mold-Rite as executive chairman. He has spent more than 35 years in the packaging industry, including serving as chairman and CEO of Graham Packaging Holdings of York, Pa.
Spence said IPC will operate Alpha and Mold-Rite as separate companies, but he frequently talks with Yates by phone. It'd be crazy not to talk to Phil, with the experience he has, Spence said.
He added that Alpha is a prototypical platform company, with room for additional growth.
IPC's other plastics businesses include water-bottle maker CamelBak Products LLC of Petaluma, Calif.; packaging manufacturer Chesapeake Corp. of Amersham, England; and playground equipment maker PlayCore Inc. of Chattanooga, Tenn.
IPC also owns New York-based Multi Packaging Solutions Inc., a printing and specialty packaging supplier.
Alpha has a great management team with an exceptional track record, Phil Carpenter, senior managing director at IPC, said in a Sept. 1 e-mail. The company serves some of the fastest-growing end markets in packaging: nutritional supplements, pharmaceutical and personal care. We know and like these markets and look to invest in suppliers to these categories. In fact, our three existing packaging portfolio companies serve these markets.
Alpha seems to have high-value assets, Parmesh Bhaskaran, a director in the Chicago office of consulting and turnaround firm AlixPartners LLP, said in an Aug. 31 e-mail.
Mold-Rite and Alpha also could have synergies in distribution channels, he said: Alpha produces containers and bottles made out of high density polyethylene and PET, whereas Mold-Rite produces rigid plastics caps and jars for potentially similar customers.
Most immediately, we will be focused on supporting our existing portfolio through capital investments and add-on acquisitions, Carpenter said.
As for new investments, we're always actively looking for great companies and outstanding managers. Our business plan has a number of good ideas, but I always prefer to talk about those after we've made the investment.
Alpha ranked No. 26 on Plastics News' most recent survey of North American blow molders, with 2009 sales of roughly $136 million. The company employs 550.