Wellspring Capital Management has liked what it's seen in the flexible packaging market since an investment in Prolamina Corp. five years ago.
And with that half of a decade of experience now under its belt, the New York City-based private equity firm is moving deeper into the business with the acquisition of Ampac Holdings LLC.
Combining the two companies, with headquarters Cincinnati, creates a firm with 16 manufacturing sites in North America, Europe and Asia.
Ampac brings 13 locations while Prolamina adds three.
Official word of the deal came Aug. 19, about a month after news of the move trickled out through Standard & Poor's Rating Services. Nobody from the private equity firm or the companies talked at that time. But S&P estimated annual proforma sales of the company at nearly $700 million.
“We believe there is increasing growth potential in the sector given the shift towards flexible packaging solutions driven by shifting consumer demands,” said Matthew Harrison, a principal at Wellspring Capital Management, in a statement this week.
Prolamina CEO Greg Tucker will lead the combined company, the private equity firm said.
A new name for the company has yet to emerge. The combined company was being referred to as Prolampac Intermediate Inc. by ratings agencies when news of the deal broke last month. But it is not uncommon for companies to develop separate legal entities while undertaking acquisitions or mergers only to have the ultimate trade name be something different.
“The company in the midst of developing its combined branding strategy and will announce a new name as part of that effort in the near future,” a spokesman for the firm said in an email Aug. 19.
Prolamina has locations in Neenah, Wis., Westfield, Mass., and Terrebonne, Quebec, a suburb of Montreal. The Westfield location, just this summer, started work on renovations.
Ampac, according to its website, has the bulk of its operations in the United States, including sites in Auburn, Wash.; Minneapolis,; Cary and Hanover Park, Ill.; Tulsa, Okla.; Mobile, Ala.; Walden, N.Y.; and its headquarters in Cincinnati.
Other sites are in Melbourn, U.K.; Kirchberg, Switzerland; Eberdingen, Germany; Ho Chi Minh City, Vietnam; and Chantrea District, Cambodia.
Key Principal Partners, in 2006, sold Ampack to a group led by Prudential Capital Group and Falcon Investment Advisors, with Ampac management retaining some ownership in the company. Key Principal Partners' initial investment in the company dated to 2000. Prudential and Falcon are now cashing out, but Ampac management is remaining.
“Certain members of the (Ampac) management team have also invested additional capital in the transaction alongside Wellspring,” according to the private equity firm. Alvarez & Marsal Capital Partners also made an investment in the combined business.
The Prolamina name, meanwhile, name dates to 2011, when Packaging Solutions Holdings changed its moniker a year after packaging industry veteran Harold Bevis and Wellspring Capital came together to create and back the company, according to Plastics News coverage at the time. Bevis, a former Pliant Corp. CEO, is no longer with the company.
The company, during those two years, also had acquired Jen-Coat Inc. of Westfield, and Excel Pac of Terrebonne. Prolamina added the Neenah flexible packaging site in 2011 after retrofitting a former Kimberly-Clark Corp. diaper factory.
Lincoln International acted as lead financial advisor to Prudential, Falcon and Ampac management in the sale and merger. William Blair acted as lead financial advisor to Wellspring.