Melbourne, Australia — Rigid plastics packaging giant Pact Group Holdings Ltd. has expansion plans, but its chairman has admitted U.S. and European companies are not high on his radar.
Speaking at the Melbourne-based publicly listed company's annual general meeting, CEO and Managing Director Brian Cridland told shareholders Pact's M&A “pipeline remains robust and we will continue to pursue a diverse range of opportunities for the group that align with our disciplined approach to M&A.”
But Chairman Raphael Geminder told a media briefing after the meeting that takeover targets in America and Europe are too expensive and he is prepared to push out his five-year plan to grow Pact into a A$5 billion (US$3.6 billion) company.
Fairfax Media quoted Geminder saying: "If you go to the European and U.S. markets, the valuations for businesses we want to buy are too high. We can't add the value we need to add to make one and one equal two.
"That might change, but today, the value is not there, so our focus is not currently on Europe and U.S. expansion. [But] we have more than enough opportunity in the domestic market, and I'm talking about Australia and Asia."
Geminder told the meeting Pact's net profit after tax and before significant items for the year to June 30 was A$85.2 million (US$61.7 million), up 43 percent on 2014.
Cridland, who retires Dec. 1, but will remain with the company until April, said the five acquisitions Pact made during the year, including contract manufacturer Jalco Group Pty. Ltd., had been integrated into the group.
Geminder said he was prepared to wait eight or even 10 years to achieve his sales target.
Cridland's replacement as MD and CEO is Malcolm Bundey, who is relocating with his family from York, Pa., where he was president and CEO of Graham Packaging Co.
Pact is Australasia's largest rigid plastics packaging manufacturer and operates in seven countries across 70 sites. There are 45 sites in Australia, 18 in New Zealand, three in China, and one each in the Philippines, Indonesia, Singapore and Malaysia.