After years of touting diversification under previous leadership, Berry Global Group Inc. is moving back to the company's roots as a consumer products packaging maker.
The Nov. 4 completion of a spinoff of a significant portion of the company — the firm's Health, Hygiene and Specialties division along with its films unit — unwinds deals that were once deemed transformative by the company.
Berry's jettisoned businesses was combined with Glatfelter Corp. to create a new company called Magnera Corp.
The deal makes sense as both firms contributed nonwovens manufacturing assets to the new entity, which is 90 percent owned by Berry shareholders and 10 percent by Glatfelter stock owners.
Through much of the 2010s Berry made a series of significant deals, such as acquiring nonwovens company Avintiv Corp. along with a series of acquisitions in the films business, including AEP Industries Inc. in 2016.
As Berry grew rapidly, critics charged that the company's stock languished and activist investors eventually were able to influence the direction of the firm. The company came to agreement with both Ancora Holdings Group and Eminence Capital in 2022, with a deal that included the appointment of three new board members. This followed some very public acrimony between the two sides.
Berry, which started in 1967 as a single-machine company in Evansville, Ind., built itself over the decades to become a powerhouse U.S. injection molding company through dozens of acquisitions. While the HH&S and films units have been jettisoned through the spinoff, Berry retains a portion of the business acquired in recent years that allowed the company to become a significant player in Europe as well.
Berry is the largest injection molder in North America according to Plastics News rankings with more than $2 billion in annual sales. It also comes in at No. 3 in thermoforming with $750 million in sales, No. 12 in blow molding with $529 million and No. 15 among North American toolmakers with $60 million in sales.
Berry acquired RPC Corp. in 2019 in a $4.37 billion deal that dramatically increased the company's overseas manufacturing footprint. That acquisition allowed Berry to quickly expand beyond its North American-heavy footprint.
RPC, of Rushden, England, was making makes plastic products in five major conversion processes: injection molding, blow molding, thermoforming, rotational molding and blown film extrusion.
Berry sold its rotomolding operations in 2022 to Iceland-based private equity groups who created the company Rotovia.
Even though Berry is simplifying its manufacturing roster, the company is still a behemoth in the plastics container market. Berry emerges from the spinoff as a company with annual sales of about $10 billion, Magnera at $3.6 billion.
Glatfelter of Charlotte, N.C., brought $1.4 billion in annual sales while Berry's divested businesses added $2.2 billion.
"With this move to optimize our portfolio, we solidify our position as a global leader of consumer-focused packaging solutions while enhancing the stability of our earnings, free cash flow and growth. We are confident that employees transferring to Magnera will benefit from the new company's strong leadership and focused capabilities, and we are grateful for their contributions," Berry CEO Kevin Kwilinski said in a statement when announcing the Nov. 4 completion of the spinoff.
Magnera starts with 46 manufacturing sites make products for segments including adult incotinence, baby care, feminine hygiene, food and beverage, home, health care, infrastructure and wipes, the company said.
"As our name suggests, this marks the start of a magnificent new era in the specialty materials industry. The merger of Berry's HHNF Business and Glatfelter forms a powerful, differentiated global leader committed to uniting cutting-edge technologies, strengthening partnerships with the world's leading brands and expanding our global reach to serve fast-growing markets and highly profitable niches," CEO Curt Begle said in a statement.