Growth, for Consolidated Container Co., is a two-way street.
Atlanta-based CCC obviously sees its first acquisition in the recycled plastic processing business as a way to help the company expand.
But the deal that brings sister companies Envision Plastics Industries LLC and Ecoplast Corp. to the rigid plastic packaging company also will help those firms as well.
CCC emerged as the winner last week for both Envision and Ecoplast following an auction run by an investment banker hired by previous owners Massoud Rad and Parham Yedidsion, according to Richard Sehring, chief financial officer of CCC.
“CCC views sustainability and recycling as a megatrend in our industry that will only increase with time. Customers, consumers and retailers are all looking for greater recycled content in products, and this strategic investment allows CCC to increase access to such products,” Sehring said in an email interview.
“CCC is in a position to help accelerate the growth of Envision and Ecoplast by leveraging its market presence,” he said.
With more than 50 container-making sites around the country, CCC is no stranger to using recycled content in new products.
But this is the first time the company will actually process its own recycled plastics.
“CCC is and has been a customer of Envision/Ecoplast for some time. However, a majority of Envision/Ecoplast's business is with other customers. We intend to build off of these great relationships and build new customer relationships, while also driving growth through CCC's customer base,” Sehring said.
Acquiring Envision and Ecoplast — the terms were not revealed — gives CCC a bi-coastal presence in the recycling business. The deal adds two locations in Reidsville, N.C., and Chino, Calif., for Envision Plastics, an HDPE recycler. CCC is owned by private equity firm Bain Capital.
Ecoplast, which calls itself California's oldest thermoplastics recycler and customer compounder, is located in Fontana. That company handles a variety of resins, including polystyrene, ABS, polypropylene, and low, linear low and high density polyethylene.
When asked about bolting on additional plastics recycling companies in the future, this is what Sehring had to say:
“We view Envision and Ecoplast as a platform for growth for CCC. It is a new capability that we intend to grow. Our first priority is to accelerate growth within Envision and Ecoplast's existing facilities. We want to ensure that the business continues its upward trajectory that has been occurring. However, as with all opportunities, if something comes to market that could potentially be a strategic fit we would evaluate it.”
In purchasing both Ecoplast and Envision, CCC gains two of the larger plastics recyclers in the country representing nearly 200 million pounds of reprocessed material annually. Envision is the larger of the companies with 145 million pounds reprocessed, according to Plastics News' ranking. That's good for No. 14 on the annual list. Ecoplast checks in with 54 million pounds of reprocessed plastics, good for No. 54 on the annual list.
While the companies are now under new ownership, they will each operate as a stand-alone business, the new owners said. Scott Booth, who has been chief operating officer at Envision Plastics since 2008, will lead the firms along with the existing management team.
“Both Envision and Ecoplast will continue to operate as they have historically as Envision and Ecoplast. They will operate as a stand-alone division utilizing their existing company names, websites, etc. and under the existing management team,” Sehring said.
That's important because while CCC has been a customer for several years, the majority of the acquired firms' business lies elsewhere.
“The staff at Envision and Ecoplast is tremendous. They are experienced and knowledgeable in the industry and fit in well with CCC's culture of integrity, quality and service,” the CFO said. “CCC has been interested in participating in recycling for some time, and the opportunity to acquire these leading companies in the marketplace, along with their proprietary technology, was ideal.”