A major Middle Eastern film manufacturer will add North American BOPP film plants to its roster, with the acquisition of Applied Extrusion Technologies Inc.
Taghleef Industries of Dubai, United Arab Emirates, and AET Films said April 5 that the transaction was approved by the boards of directors of both companies and is expected to be finalized by the end of the second quarter of this year, pending regulatory approvals. They did not disclose terms, and spokespeople for both companies declined to comment further.
Taghleef claims annual biaxially oriented polypropylene film capacity of 572 million pounds. AET said it has 220 million pounds of specialized BOPP film capacity.
Taghleef, privately controlled by the Al Ghurair family, has manufacturing operations in Dubai, Oman, Egypt, Hungary, Italy and Australia. It was formed in 2006 by the merger of companies in Egypt, Oman and Dubai. The firm has had production in Australia since 2007, and acquired operations in Italy and Hungary in 2008. Last year, Taghleef said it was installing a new 8.7-meter-wide BOPP film line at its plant in 6th of October City, Egypt, near Cairo, for completion late this year.
Taghleef established a U.S. presence in 2010 with a distribution center in Charleston, S.C. Last year, it set up a sales hub in Shanghai. In 2007, it added a distribution center in Germany.
Besides BOPP, Taghleef makes biaxially oriented polylactic acid film and cast PP film.
AET Films, based in Wilmington, Del., operates plants making BOPP films in Terre Haute, Ind., and Varennes, Quebec. It focuses on specialties for food packaging, product labeling, non-food applications and a new specialty line called SynDecor, an all-purpose overlay that the firm markets as offering design flexibility, longevity and sustainability. On its website AET Films claims to have more than 500 customers buying 80 different product lines. AET Films was established in 1986.
Investment bank Houlihan Lokey of Los Angeles is serving as financial adviser to AET Films and its shareholders.
The BOPP market has been undergoing consolidation, market analyst Tim Burns said in a phone interview. There is a lot of price pressure in the market, he said.
“Recently, 10 or more companies have been in play, and about half have been sold,” Burns said from his Cranial Capital Inc. office in Solon, Ohio.
He said buying AET Films would be a good move for Taghleef. “Taghleef is already in key geographic areas, so they chose a North American-oriented company with good management, which was recently recapitalized and is attempting to focus on niche markets,” Burns said.