Updated — While the acquisition of Laddawn Inc. certainly is not one of Berry Global Group Inc.'s larger purchases, the deal does provide some unique attributes to the multinational plastics company.
Laddawn, based in Devens, Mass., brings an electronic commerce approach “with proven web and mobile sale platforms,” according to Berry.
Laddawn makes blown polyethylene bags and films, generating most of its sales through e-commerce. The company has 380 employees at five manufacturing locations in Atlanta, Dallas, Sterling, Mass.; Sparks, Nev., and Manchester, Iowa. Sales were $145 million for the 12 months ended July 31.
Laddawn, named for Ladd Lavallee and Dawn Seiple, siblings that owned the company founded by their parents, gains access to a much broader portfolio of products and access to capital to continue growing.
“I don't know if Ladd and Dawn were interested in selling the company originally. We've been growing so quickly. We doubled in the last five years. We doubled in size in the five years before that,” said Owen Richardson, vice president of sales and marketing for the company.
That history of organic growth also was attractive to Berry.
“Berry has known and respected Laddawn as a competitor for some time. When an opportunity arose to engage in strategic level discussions, Berry worked with Laddawn and their advisors to arrive at a mutually beneficial agreement,” Berry said in emailed responses to questions.
Laddawn is 25 times larger than it was 25 years ago, and has more room to grow, the company believes. “With that sort of growth and the growth we continue to have this year, comes a lot of questions about how you finance all that growth. And, of course, with all that growth comes all kinds of needs to continue to expand the business,” Richardson said.
Laddawn initially explored the possibility of a private equity investment before deciding to sell the whole business to Evansville, Ind.-based Berry. Both Lavallee and Seiple left Laddawn after the sale.
“To the extent that there is a sad part, that is it. Ladd and Dawn are beloved. They are brilliant and they are kind and they are giving,” Richardson said. “But part of being acquired by Berry means that they give up their ownership in the business.”
While difficult to sell, the decision will allow the siblings to move on.
“I'm sure they are going to miss this place,” Richardson said. “But for them, I think the next stages of lives are going to involve more giving. They are terrifically philanthropic people.”
Along with the e-commerce aspect of the acquired business, Richardson said Laddawn's expertise in serving small- and medium-sized orders also was attractive to Berry.
Laddawn does about 60 percent of its sales through its website, and other 20 percent through electronic data interchange, a system where orders automatically take place as needs arise. Only 20 percent comes through traditional sales.
Berry, for its part, pointed directly at Laddawn's e-commerce capabilities as one of the reasons to make the deal. And that platform has the immediate ability to include other Berry products.
“We believe Laddawn's highly technical online capabilities will support immediate growth, via this e-commerce platform, to assist in quicker customer response times and small order fulfillments for the faster growing small and medium sized customer base,” Berry CEO Tom Salmon said in a statement.
Berry will use the next few months developing an integration plan, including what the company calls a “key focus” on those small and medium customers.
Berry is a multinational company with sales of more than $7 billion annually and more than 130 locations.
Richardson said Laddawn became “big fans of Berry” during the sales process.
“Ladd and Dawn did not have to sell the business. They only sold it because they found the right partner. Berry totally gets us. They have appreciation for everything we've accomplished. And, more importantly, they have the resources to finance the growth we're talking about,” Richardson said.