Benpac first made a splash in plastics machinery nearly two years ago, when it purchased 26-year-old W. Amsler Equipment Inc., a Bolton, Ontario, blow molding equipment maker founded by Werner Amsler, a Swiss immigrant who had worked in plastics since 1970.
Amsler was looking to retire, and he found a buyer for his company in Benpac Holding, a company following a one-stop-shop strategy to bring together leading packaging supply chain companies.
When Benpac purchased Amsler Equipment in January 2020, the company already had some related packaging holdings in Europe, Asia and North America. When Amsler officials disclosed the deal with Benpac 11 months later, they hinted that additional acquisitions were on the horizon.
That was because a potential deal with Niigon was already in the works.
The Schad family first approached Benpac through Scotia Bank, Corvi said. Benpac had on-and-off talks to buy Niigon assets in fall 2020 and spring 2021, he added.
Benpac was interested in acquiring Niigon's buildings and intellectual property, Corvi said.
On June 10, it appeared that a deal with Niigon was close when Benpac announced it had moved Amsler to the Niigon facility in Vaughn because its previous site in Bolton was "too small" to meet the demands of a "future-oriented corporate strategy."
A Benpac news release at the time described the 40,000-square-foot Niigon building as one of Canada's most environmentally friendly facilities with solar panels on the roof generating electricity and a geothermal system to provide heating and cooling.
At the Niigon site, the release continued, Amsler would provide its customers with spare parts, service, bottle development and trial runs of bottles, engineering support, machine retrofits, leak testers and spin trimmers, and tests of Amsler machines built in Switzerland.
Corvi says now that he was negotiating a deal to buy certain assets of Niigon, but that the closing was contingent on a site visit because he was concerned about "accumulating negative information" regarding high debts, unpaid bills and management problems at Niigon.
Corvi arranged travel from Switzerland to Canada on Sept. 7-8, 2021 — as soon as pandemic-related restrictions were lifted. He said he was shocked by what he saw.
"Niigon was in such bad shape that it was difficult for me to see a plan behind an asset deal," Corvi said. "Bad management, no orders, no plan for the future, disillusioned employees, and most importantly, high debt. In particular, sales, especially in the PET sector, were criminally neglected. There was also no advertising strategy. The important PET area in particular was very poorly managed."
The deal was in jeopardy.
Corvi said he had questions for Niigon management about the company's future, sales, business plan, finances and employee structure. He asked for a management meeting but said it was "surprisingly canceled the day before."
Questions then were submitted to Scotia Bank as the representative for Niigon and the Schad family. Corvi said he did not get a reply from the bank either.
"I have said in no uncertain terms that there would be no deal without answers," Corvi said.
When it became obvious that Benpac was not going to buy Niigon, the injection press maker filed for bankruptcy and moved to evict Amsler.
If a buyer steps up for the building where Amsler relocated, Corvi said he will try to enter into lease agreement with the new owner. He also is looking at alternative locations.
The problems at Niigon and Amsler are drawing attention to Benpac's mostly under-the-radar plan to create a holding company with a goal of offering everything related to PET bottle production, from tooling and machines for injection molding preforms to equipment for blow molding, filling and labeling.
Despite the challenges, Benpac officials aren't giving up.
"Benpac continues to pursue its strategy to grow in the packaging sector," Corvi said, pointing to PET and metal packaging as well as thin-wall packaging, paper-based packaging and blisters.
"The aim is to be able to offer the entire value chain, from raw material to palletized product," Corvi said. "To this end, Benpac will restructure the entire packaging business and manage it under one roof, in six divisions. This optimization will be implemented in the coming months. New companies or production centers will also be created for this purpose."
In the background, however, the talks between Niigon and Benpac faced snags on the heels of another problem deal.