Pretium seeks acquisitions that aid both companies

Pretium Packaging LLC prides itself on being different than the typical rigid plastic packaging company.

And the vision of success has evolved for CEO Paul Kayser not only over his career but also during his 3½ years as leader of the Chesterfield, Mo.-based company.

Pretium is not interested in being a company that consolidates acquisitions, strips off their names, and slashes costs to build a monolithic commodity player.

Instead, Kayser said, Pretium looks to acquire companies that can contribute to Pretium's success while also being helped themselves.

"It's really evolved over time. When I first joined Pretium, we really were looking for companies that were in the blow molding sector. It really wasn't much more refined that than," Kayser remembered.

But the acquisition of Custom Blow Molding of Escondido, Calif., in 2016 helped Kayser and Pretium alter the way the company looks at building value for customers

CBM brought a deep knowledge of sports nutrition market beyond just container making, the CEO said, which allowed the company to better serve clients from a holistic view. This is an approach that now helps guide all of all of Pretium.

"We really are a different company than we were just a few years ago. We're heavily focused on innovation, the latest technology. But we're very focused on the markets we serve," Kayser said.

Pretium is not shy about advertising a desire to grow through acquisition. The company wants other firms to know they are in the market, but it is not growing for growth's sake, however.

Pretium, Kayser said, is looking for "acquisitions that work for both parties, that everyone feels good about the merger, not the day before or the day after, but one year, two years, three years down the line."

That means finding companies with similar cultures, ones with strong brands in their segments and firms looking for the support of a larger company to help continue expansion.

The right kind of growth is what Pretium is seeking these days. The company makes that as clear as one of its PET containers.

Olcott Plastics Inc. of St. Charles, Ill., is a prime example of the kind of firm that not only brings value to Pretium, but one that also benefits by being part of a larger company with more financial muscle, the CEO said.

Olcott traces its roots to 1969 when Joseph Brodner Jr. used to sell plastic containers out of the back of his family station wagon on the south side of Chicago. From those humble beginnings, the company has grown into a well-known supplier in its markets, Kayser said.

"Olcott has a very strong brand for beauty care products in a number of different hair care and skin care sectors. They are just well known for their beauty care products and solutions. We want to continue that brand and keep it alive," he said.

So instead of removing the Olcott name from the business, Pretium has doubled down on the company's place in history and importance in the markets it serves.

Pretium has even moved some containers made prior to the Olcott purchase to that company's line to take advantage of the brand's strength, Kayser said. "How crazy would I be to erase that? ... That's just silly."

"If it's got a strong brand, it's a leader in the market, it's got a great product portfolio that's relevant for that market, those are things that are key criteria for us. We've really gone beyond blow molding. I came in here and really thought no one in the world is looking for a blow molder anymore. I don't think anyone has looked for a blow molder for quite some time," he said.

"I think what they are looking for from a customer perspective is you are looking for a company with deep expertise in your market, that can serve you, supply you packaging, supply it in a market-relevant way," Kayser said.

Pretium, once focused just focused blow molding, has expanding over time to now include injection molding. The product line also has evolved to include closures and dispensing products.

Thanks to both organic growth and a handful of acquisitions in recent years, the company now has 17 locations — 16 in the United States and one in Canada — with sales approaching $500 million annually.

The organic growth includes the construction of a new plant in Salt Lake City as well as expansion of existing facilities.

Kayser expects Pretium will be a $1 billion company within the next five years as the firm continues to seek out acquisition candidates and expand existing business. Pretium was No. 14 in the most recent Plastics News ranking of top North American blow molders.
Pretium will never be as large as Graham Packaging Co. or Amcor Ltd., for example, but looks to the small-to-medium run market where orders can range from maybe a million to 20 million units per year. That's a sweet spot below the giants where Kayser said Pretium can use its expertise, he said

Kayser likes to listen and observe as much as talk when considering a transaction, finding out what makes a potential acquisition candidate successful. He then looks to build on that.

What the CEO is not looking to do is bolt on a business, slash jobs and costs and push out products that are incrementally less expensive.

He also knows being on the other end of an acquisition can be tough, and Pretium works to make sure the process is good for both sides.

"I think that's where value gets created. In my career, and I often tell people this during the process of an acquisition, I've been acquired three times in prior lives. And I would tell you that the experience has never been great as an employee," he said.

An improperly executed acquisition can humiliate employees of the company being absorbed, Kayser said. And that's tough to overcome.

"I'm a good listener and I'm relatively observant," he said. "It's easy to observe what works. ... What's harder to observe: What are the bad things that might happen, right? So the value gets destroyed," he said. A key is looking beyond the surface, such as technology and sales numbers, to determine what makes companies successful.