M&&A down in second half of 2018 as packaging, rollups take spotlight

The pace of plastics dealmaking was fast and furious in the second half of 2018.

Although the number of deals declined overall, several big transactions were made and some buyers dove into the market more than once.

The biggest deal took place was in flexible packaging, where Amcor Ltd. of Melbourne, Australia, acquired Bemis Co. Inc. of Neenah, Wis., in a $6.8 billion all-stock deal. Market watchers said that Amcor sees the deal as a way to significantly expand its flexible packaging business in the Americas and that Bemis sees an opportunity to hitch itself to the stability of a larger company after spending recent years trying to turn its business around.

Officials with both firms said at the time of the announcement that the deal is "transformational," giving Amcor a global flexible packaging presence when combined with its existing operations.

The ongoing buying spree of Westfall Technik Inc. also drew notice. The Chandler, Ariz.-based firm made three second-half deals and now has made 10 overall since being launched by injection molding veteran Brian Jones in late 2017.

Westfall's second-half deals included Georgetown, Ontario-based Mold Hotrunner Solutions Inc., which makes hot runners and injection presses for micromolding, mold maker Extreme Tool & Engineering Inc. of Wakefield, Mich., and the North American operations of media packaging firm Amaray, including injection molding factories, in Pittsfield, Mass., and Elizabethtown, Ky.

Financial pro Thomas Blaige said that the plastics market could see more Westfall-type rollups in the years ahead.

"There could be a Brian Jones in blow molding or thermoforming or other areas," said Blaige, chairman and CEO of Blaige & Co. in Chicago. "Someone with experience knows how to find high-value companies."

Such rollups "can create value if their integration is done in the right way," added David Evatz, managing director with Stout Risius Ross LLC in Chicago.

Other major second-half plastics deals included:

• Fiberon LLC, a leading producer of composite-based decking, railing and fencing, was acquired by Fortune Brands Home & Security Inc. in a deal valued at $470 million. Deerfield, Ill.-based Fortune will now place Fiberon, of New London, N.C., in its newly formed doors and security unit.

• Rowmark LLC, a maker of engineered extruded plastic sheet, changed hands when its parent firm — EXT Acquisitions Inc. — was sold by private equity firm Bertram Capital to PE firm Windjammer Capital Investors.

• Plastic sheet giant Plaskolite LLC of Columbus, Ohio, was sold to investment firm PPC Partners by a unit of Charlesbank Capital Partners for an undisclosed price. Chicago-based PPC is majority-owned by the Pritzker family, including J.B. Pritzker, who was elected governor of Illinois on Nov. 6. Plaskolite has enjoyed rapid growth, making 16 acquisitions in 11 years.

Less than a month after being acquired, Plaskolite made its fourth deal of 2018, acquiring the extruded lighting sheet and profile lens business of ALP Lighting Components Inc. for an undisclosed price.

• Consolidated Container Co. expanded its operations with the purchase of Deltapac Packaging. Montreal-based Deltapac makes high density polyethylene bottles for specialty chemical, cosmetic, food and pharmaceutical applications. The acquisition of Deltapac was made through Reid Canada, a subsidiary of Atlanta-based CCC.

Consolidated also in the second half bought Canadian firms Polybottle Group Ltd. and Humberline Packaging Inc. Those firms have bottle-making plants in Toronto, Vancouver and Edmonton, Alberta. Both Polybottle and Humberline had been owned by ABC ​ Group Inc. of Toronto.

• Building products makers Ply Gem Parent LLC, which serves the residential market, and NCI Building Systems Inc., which sells to the commercial market, combined forces in an all-stock deal to create a one-stop solution for exterior building envelopes.

NCI will hold a majority share in the combined business and hold more seats on the board for the new company. Houston-based NCI issued 58.7 million shares to Cary, N.C.-based Ply Gem, which is worth $1.2 billion based on market closing value on July 17. NCI will own 53 percent of the new company, with Ply Gem shareholders taking the remaining 47 percent.

Shortly after the NCI deal, Ply Gem acquired the hollow-core vinyl window and patio door business of Andersen Corp. for $190 million in a deal that includes four manufacturing plants employing more than 4,000 people. The facilities produce the Silver Line and Andersen Craftsman brands.

• AptarGroup Inc. announced plans to acquire CSP Technologies Inc., a specialty plastics packaging maker, for $555 million. Auburn, Ala.-based CSP also has manufacturing sites in Atlanta and Neiderbronn, France. Its products include desiccant polymers and protective packaging, including blister packaging, vials, films and components.

• Oncap, a unit of PE firm Onex Corp., bought Precision Valve for $111 million. Precision is credited with inventing the aerosol valve. The firm does business as Precision Global and is based in Greenville, S.C., with 18 facilities in 15 countries on six continents.

Precison Global joins equipment maker Davis-Standard LLC and rigid container maker IntraPac International Corp. as other plastics-related investments for Oncap. Precision makes more than 12,000 different products for the personal care, household, food and beverage, industrial and pharmaceutical markets. They include aerosol valves and accessories, actuators, pumps, caps and closures.

• London-based PE firm BC Partners purchased Adams Manufacturing Corp., the largest U.S. manufacturer of outdoor resin furniture, from founder Bill Adams and his family. Terms were not disclosed.

• Specialty plastics extruder Pexco LLC, a frequent dealmaker, bought Custom Extrusion Inc. Custom is based in Sheffield, Mass., and also runs a manufacturing facility in Asheboro, N.C. Pexco CFO Steve Demboski said the Custom deal gives Pexco "a footprint in the Southeast."

Pexco also in the second half bought Insultab Inc., a Woburn, Mass.-based maker of heat-shrinkable and non-shrink tubing products. Insultab serves a variety of industrial and commercial market segments, including electrical, mechanical, structural, recreational and automotive.

• Serial plastics investor Graham Partners of Newton Square, Pa., found another investment in Advanced Barrier Extrusions LLC. Rhinelander, Wis.-based Advanced — also known as ABX — makes high-barrier films used in the protein, cheese and specialty food markets in North America.

• Rigid packaging distributor Berlin Packaging LLC received a $500 million investment from the Canada Pension Plan Investment Board. Investment firm Oak Hill Capital Partners and Berlin's own management will continue to be investors. Berlin distributes a variety of packaging, including plastic products. Annual sales are $1.4 billion.

• On the U.S. West Coast, plastics investor Dennis Savalia continued his buying spree by acquiring Performance Engineered Products Inc. of Pomona, Calif. PEP is Savalia's sixth purchase of a plastics processing business in three Southern California counties in less than two years.

Savalia acquired PEP from the estate of Carl Joseph Dispenziere Sr. Terms were not disclosed. Savalia intends to consolidate his five smaller businesses within PEP's leased 50,000-square-foot facility during the next six months.

In 2017, Savalia acquired Honor Plastics, Pearce Plastics Inc., Precision Plastic Concepts Inc. and Kowalski Molding Service Inc. and its machine shop. In 2018, he added Target Molds Inc.

• Springfield, Mo.-based fishing and hunting gear supplier Lew's Holdings Corp. reeled in a big one with its acquisition of Southern Plastics Co. Inc. Southern makes at least 70 percent of all soft plastic bait made in the U.S. The injection molder makes hundreds of thousands of jelly worms every day at a plant in Eufaula, Ala., for the private labels of Bass Pro Shop, Zoom, Kalin's and Strike King.