Updated — Diverse packaging major DS Smith plc plans to expand its North American flexible packaging and bag-in-box business by acquiring Parish Manufacturing Inc.
London-based DS Smith announced its proposed acquisition of Parish on Dec. 8 for undisclosed terms. Parish fits in its Rapak business, which includes a production plant in Romeoville, Ill., where its U.S. headquarters is based, and a facility in Union City, Calif.
The acquisition fits DS Smith's strategy to build its business in North America, the company stated in an email. Parish's strong performance, compatible business model and expertise fits its flexible packaging and dispensing operations under the Rapak and Worldwide Dispensers brands. Rapak and Worldwide Dispensers operate at 11 locations across four continents.
Parish, in Indianapolis, manufactures bag-in-box systems for food, beverage and cleaning chemicals, as well as single-service sanitary liners in sizes from one quart to 50 gallons, and bag-in-box filling equipment. It injection molds most of its fitments and valves for the dispensing systems. It recently expanded its Indianapolis production capacity.
Rapak makes a range of bag-in-box dispensing systems, plastic bags and fitments and related filling equipment. It injection molded about 686 million plastic taps and fitments for its fiscal year, which ended April 30.
DS Smith's Plastics division includes its Rapak flexible packaging and dispensing systems as well as other plastics products such as single-use and returnable rigid packaging, polypropylene sheets for graphics and multi-wall polycarbonate sheets for cladding and roofing, and molded plastic foam products for automotive, HVAC, construction, food and pharmaceutical markets. The Plastics division logged sales of 283 million euros ($297 million) in its most recent year, down 6 percent from a year earlier. Operating profit was 32 million euros ($33.6 million) and earnings before interest, taxes, depreciation and amortization was 41 million euros ($43.1 million). The division, based in Romeoville, runs 22 manufacturing sites in Europe, New Zealand, the United States and Thailand and employs about 2,100.
DS Smith's largest businesses are in corrugated paper packaging and paper fiber recycling. Its total annual sales are about 3.8 billion euros ($4 billion). It claims to be the largest paper recycler in Europe.
DS Smith hired Keith Ledbetter as chief financial officer of its Plastics division in August. Prior to the appointment he had been CFO at MeadWestvaco's Plastics division after holding senior financial roles at Novartis, GE Capital and Lockheed Martin.
DS Smith CEO Miles Roberts, commenting on flexible packaging, said in a news release: “The proposed acquisition will further enhance our customer offering in this important and growing market segment.”
The firm expects to finalize the Parish purchase in the first quarter of 2017. DS Smith is reviewing integration of Parish with its businesses. When the deal closes, Parish employees will become DS Smith employees and management will report to Rapak North America.
DS Smith estimates the global market for specialty flexible packaging and dispensing systems at about 800 million euros ($840 million) per year.
