DEERFIELD, ILL. (Oct. 17, 12:55 p.m. ET) — Packaging manufacturer Pregis Corp. will sell its Kobusch-Sengewald business unit to Sun European Partners LLP for $160 million.
Proceeds from the deal will be used to repay a portion of Pregis' asset-based lending facility and will be otherwise retained for debt repayment, general corporate purposes, and future reinvestment, according to an Oct. 17 news release from Deerfield Ill.-based Pregis.
Warburg, Germany-based Kobusch-Sengewald is a supplier of specialized flexible packaging films for the food, consumer goods and medical industries, along with semi-rigid and rigid packaging for the high-end food market. It operates six plants, with two in Germany, three in the United Kingdom and one in Egypt.
Chicago's William Blair & Company LLC served as sell-side advisor to Pregis.
Buyer Sun European Partners is the London-based unit of Sun Capital Partners Inc., of Boca Raton, Fla., which has invested in over 270 companies worldwide with combined sales upwards of $40 billion. Sun Capital's plastics portfolio includes France's Albéa (formerly Alcan Packaging's beauty unit), UK-based Britton Flexibles Ltd., Germany's Pacccor, Exopack Holding Corp. of Spartanburg, S.C., and POP Displays of Yonkers, N.Y.
Sales of the Kobusch-Sengewald business for the 12 months ended Sept. 30 were $211.6 million, with adjusted earnings before interest, taxes debt and amortization of $24.8 million, according to Pregis.
The company on Oct. 3 announced it would sell its Hexacomb paper packaging unit to an affiliate of Boise Inc. for $125 million, with proceeds used similarly to the Kobusch-Sengewald sale.
For the second quarter of 2011, the company reported a loss of $4.9 million on sales of $242 million, compared to a loss of $3.6 million on sales of $218 million for the year-ago period.
In March, Pregis refinanced a $50 million revolving credit line, entering into a $75 million credit agreement with Wells Fargo Bank.
Pregis operates 46 facilities in 18 countries, and employs 4,000. According to Securities and Exchange Commission filings, 63 percent of its sales are outside the United States.
The company ranked 38th among North American film and sheet manufacturers in Plastics News' most recent industry survey, with 2010 total sales of $873 million.