Ring Container sold to private equity firm MSD Partners

Ring Container Technologies Corp., one of North America's largest blow molded container makers, is selling to an investment firm backed by Michael Dell.

Ring, with annual sales of more than $300 million, makes high density polyethylene and PET bottles for food service, retail food and other markets.

The seller is Carl Ring, who received the lifetime achievement award from the Blow Molding division of Society of Plastics Engineers in 2013. The buyer is MSD Partners LP, an investment adviser created by the principals of MSD Capital to allow investors to take part in strategies developed by MSD Capital, a private investment firm that exclusively manages investments for Dell Inc. founder Michael Dell and his family.

Terms were not disclosed.

The deal includes manufacturing sites in 17 cities in the United States, Canada and the United Kingdom. In addition to blow molder Ring Container, the transaction also includes Rapac LP, described as the largest expanded polystyrene recycler in the United States. Rapac also makes engineered resins.

“Throughout the due diligence process, we maintained a commitment to identifying a new, long-term owner who appreciated Ring's culture and other qualities that have been fundamental to our growth into an industry leader,” Chairman Carl Ring said in a statement. “MSD Partners not only is an organization that we respect, but also it is a seamless fit with our culture and the best possible owner to move our company forward.”

Rick Weil, managing director of investment banking at Mesirow Financial Inc. in Chicago, was not surprised Ring was sold. But, he added, the new owners were unexpected.

“It's interesting to see. Ring is one of the leaders in the industry. And I'm not surprised it attracted the attention and investment from somebody like Michael Dell and their entity,” Weil said.

“But I think that what's surprising to me is that someone like Michael Dell, who is known as a Renaissance man and is known for groundbreaking technology in its time, has chosen to park money, and not a small amount of money, into the blow molding industry,” he said.

“I'm sure they see a quality company, one that can be built upon with further acquisitions,” he continued.

Weil said it is striking to see someone outside the industry so associated with high-tech set sights on a middle-market company like Ring.

“He is not looking to keep it the way it is. I'm sure he has plans to grow it,” Weil said, adding he would not be surprised to see Ring serve as a growth platform to expand packaging holdings to create “a global powerhouse. I think that's probably in his DNA to do so. There's ample opportunity.”

Plastics packaging provides investment opportunity because of its stability and fragmentation. Even when the economy weakens, people still need to use products packaged in plastic containers, he said.

Ring, based in Oakland, Tenn., fit MSD Partners' criteria for several reasons, the investment firm said in a news release.

“Ring fits seamlessly with MSD Partners' strategy to invest for the long term in companies that are stable, in industries that are thriving, and in management teams that are able to generate growth,” said Kevin Brown, a managing director in the private capital group at MSD Partners.

Ring ranked 13th in the most recent Plastics News ranking of blow molders in North America with estimated annual North American blow molding sales of $300 million and estimated overall sales of $370 million.

Carl Ring joined Ring Can Corp. in 1980 and helped diversify the firm from metal can manufacturing to blow molded containers. The company grew organically, primarily, but also made an acquisition in 2012, when it bought Bway Corp.'s plastic bottle business.

Ring has about 700 employees, and the deal is expected to close during the fourth quarter.

Ring CEO Ben Livingston will continue to in that role, with existing members of management, who retain their ownership stake in the firm.