A proposed sale of Closure Systems International Inc. is looking more likely.
London's Financial Times newspaper reported Sept. 5 that Auckland, New Zealand-based Rank Group Ltd. has hired JPMorgan to sell CSI, a major producer in plastic and aluminum closures with more than 30 manufacturing sites in more than 20 countries around the world.
The report quoted anonymous sources and said that there is no guarantee that a sale will take place.
The news is not a surprise. Rank Group's Reynolds Group Holdings Ltd. unit had announced on July 28 that it was strategically reviewing CSI; Evergreen Packaging Group, a large producer of carton packaging, paperboard and paper; and its SIG Combibloc business, a manufacturer of aseptic beverage cartons and related filling equipment.
Reynolds had announced the reviews in a 6K filing with the U.S. Securities and Exchange Commission. In the filing Reynolds said the reviews “may result in a decision to sell some or all of those businesses, although no decision has been made at this time to do so.”
CSI is based in Indianapolis. Its North American manufacturing plants are in Salt Lake City; Olive Branch, Miss.; Kilgore, Texas; and Ensenada, Mexico. It is also partner in a joint venture in Sandston, Va. CSI supplies a wide range of markets, from food and beverages to pharmaceuticals to automotive fluids, and boasts it makes more than 95 billion closures annually. In 2012 it expanded its Kilgore plant.
Rank is owned by Graeme Hart, reputedly New Zealand's richest man.
Reynolds reported its closures business logged $169 million in adjusted earnings before interest, taxes, depreciation and amortization for the year ended Dec. 31. In the previous year the business's EBITDA was $187 million.
The Financial Times report estimated that CSI and Evergreen may be sold for about $4 billion, with CSI going for more than $1.5 billion.