Greif Inc. is continuing the company's intense interest in the blow molded jerrycan business with a new acquisition valued at more than half a billion dollars.
Paris-based iPackChem, coming off its own acquisition just weeks ago, is now being acquired by Greif in a purchase valued at $538 million. That brings the company's investment in jerrycans and plastic containers to north of $800 million in less than a year.
"The iPackChem portfolio is in perfect alignment with Greif's strategic growth aspirations in jerrycans and other small plastics," Greif CEO Ole Rosgaard said in a statement. "Its state-of-the-art facilities are located in many of the regions we already serve, leading to significant value creation opportunities."
IPackChem adds 13 locations in eight countries, along with 1,400 employees, to Delaware, Ohio-based Greif. Sales for the 12 months ending Sept. 30 were $235 million, and adjusted earnings before interest, tax, deprecation and amortization were $57 million. The sale price represents a 9.4 times adjusted EBITDA.
"IPackChem allows us to enter into new and attractive geographies and end markets with a scaled position upon which we can further grow through organic investment," Rosgaard said.
About a month ago, iPackChem took a majority stake in TPG Plastics LLC of Murray, Ky., a move the company said at the time would allow for the introduction of the company's in-mold fluorination barrier technology to North America. TPG makes blow molded products, including fuel containers.
Greif is No. 17 in the newest ranking of North American blow molders from Plastics News with $330 million in sales.
TPG would add another $35 million to Greif's North American sales.
The purchase by Greif ends a string of private equity owners for iPackChem, which was last sold in 2021 to private equity firm SK Capital Partners LP by French private equity firm Sagard Holdings ULC.
IPackChem was founded as Airopak in 1987, then a division of Air Products, a company now known for supplying industrial gases. Ownership changes over the years eventually led to private equity firm Cerea buying the company in 2013 and renaming it to iPackChem the following year. Cerea eventually sold the business to SK Capital Partners.
IPackChem CEO Jean-Philippe Morvan said in a statement that Greif's "industry expertise and customer service orientation" will benefit his company's global customer base.
Jerrycans date to World War II and were first designed by Germany to efficiently transport fuel and water. Allied forces had containers of lesser quality and design and eventually replicated the German model, which features handles for easy carrying.
Germans called the 20-liter can wehrmacht-einheitskanister, or armed forces standard container. But Allied forces started calling them jerrycans, after the slang "Jerry" name they gave to German soldiers.
Today, jerrycans come in various sizes and are used to not only transport water and fuel but also a variety of chemical products. Fluorination of the containers keeps chemicals from migrating through plastic during storage. Fluorine gas is introduced to the inside of bottles during the high density polyethylene extrusion blow molding process. The fluorine creates a chemical modification on the inner surface that serves as a barrier.
Jerrycans, until 1970, were made of metal. But that all changed when Finnish designer Eero Rislakki created the first plastic model. They are known for their tall, rectangular shape with top-mounted handles designed for easier transportation.
Now, more than 50 years later, Greif sees that segment as a growth market, having invested more than $800 million in the segment during the past year alone. The deal for iPackChem follows the acquisition of Reliance Products Ltd., a single-site operation in Winnipeg, Canada, making jerrycans and other containers.
In late 2022, Greif acquired Lee Container in a $300 million deal that added three sites blow molding containers in Homerville, Ga.; Centerville, Iowa; and Nacogdoches, Texas. Lee Container also makes jerrycans and other containers.
Terms of the Reliance Products purchase were not disclosed at the time of purchase, but the combined acquisition price of Lee Container and iPackChem totals $838 million.
Greif is a broad-based industrial packaging maker that creates products using steel, plastic and paper. The company has annual sales of $6.35 billion for fiscal year 2022.