For Huhtamäki Oyj, the decision to buy flexible packaging maker Positive Packaging is all about going where its customers are heading.
A $336 million (247 million euro) deal to acquire Positive Packaging operations in India and the United Arab Emirates will bring nine manufacturing sites.
“It further enhances our position in India and provides us with much improved access to the fast growing markets of Africa and Middle East,” Huhtamäki CEO Jukka Moisio said in a statement. “Many of our global customers are investing heavily to grow in these markets, and now we are even better resourced to help them grow.”
Acquiring Positive Packaging's operations in India and UAE will bring about 220 million euros ($300 million) in annual sales to a company that posted 2.3 billion euros ($3.13 billion) in sales last year.
Huhtamäki, already with 14,400 employees, adds another 2,500 workers through the Positive Packaging deal, the company said. Along with the nine manufacturing sites, Positive Packaging also brings sales offices in seven countries.
"With the acquisition we expand our flexibles manufacturing into Middle East and double our sales in Africa with an unmatched footprint," said Shashank Sinha, executive vice president of flexible packaging for Huhtamäki, said in a statement.
“Positive Packaging's expertise in high quality printing and cylinder making, as well as their strong focus on innovations are a perfect fit for Huhtamäki's growth strategy,” he said.
Making the deal for Positive Packaging is nothing new for Huhtamäki, which has transformed from a self-described “a multi-industry company” into a consumer packaging firm through nearly 200 acquisitions and divestitures since 1980, according to the company's website.
Positive Packaging is being sold by the Enpee Industries plc, an international manufacturing conglomerate dating back to 1961. The company's holdings also include Vista Film Packaging, which makes cast polypropylene films and barrier laminates.
While Huhtamäki is acquiring sites in India and UAE, Enpee said the RenewSys division of Positive Packaging in Bangalore, India, is not part of the deal. RenewSys makes ethylene vinyl acetate (EVA) encapsulant and backsheet for solar modules. Also not part of the deal is Positive Packaging's operations and associated companies in Nigeria, Enpee Chairman Sanjay N. Kirpalani said in an announcement.
“The promoters of Positive Packaging are convinced that the takeover will help accelerate its growth and give its dedicated team greater opportunities to excel,” Kirpalani said in the announcement.
The debt-free purchase is expected to close during the fourth quarter of this year and is subject to regulatory approval.