MASON, MICH. (March 21, 10 p.m. ET) — Solo Cup Co. of Lake Forest, Ill., announced today that it is being purchased by Dart Container Corp.
Solo and Mason, Mich.-based Dart said they have an agreement for Solo to be sold in a $1 billion transaction. The deal is subject to regulatory approval and expected to close in the third quarter. Dart is the country's largest maker of foam cups.
Robert Korzenski, Solo's chief executive officer, said in a news release that he believes he ss "putting the company in the right hands to succeed and grow going forward."
The company has been struggling financially ever since it bought competitor Sweetheart in 2004 for $917.2 million. Solo was unable to efficiently integrate the two companies and combined with an economic downturn, began to experience consecutive quarters of losses.
In 2007, Solo sold a portion of the firm to New York-based Vestar Capital Partners IV LP. Vestar Capital had helped finance Solo's Sweetheart deal. Founder Leo Hulseman still maintains majority control of the papergoods and container manufacturer.
Since then the company has closed several plants and trimmed more than 1,000 jobs.
Dart CEO Robert Dart said in the release that because his firm is privately held, it can take the time needed "to integrate Solo in a thoughtful, analytical manner to ensure lasting success."
Dart's foam beverage cup business took a potential blow today when McDonald's Corp. said it might have found a replacement for polystyrene foam.
About 2,000 of the company's restaurants, mostly West Coast operations, will be testing a double-walled fiber hot cup in an attempt to phase out the usually landfill-bound foam cups. McDonald's said the objective is to assess customer acceptance, operational impact and overall performance.
In addition to foam cups, Solo and Dart are also major thermoformers of foodservice products, including drink cups. Solo is the No. 2 thermoformer in North America, with estimated related sales of $790 million, according to Plastics News' most recent ranking. The company had total corporate sales of $1.582.9 million.
Dart was the No. 3 thermoformer in the ranking, with estimated relevant sales of $480 million. The company has total corporate sales of $1.455 million.
Even the combination of Solo and Dart will be smaller than the No. 1 thermoformer, Lake Forest-based Pactiv Foodservice, with estimated sales of $3.2 billion.
Lorene Yue of Crain's Chicago Business and Don Loepp of Plastics News contributed to this report.