Silgan Holdings Inc. is acquiring injection molder Gateway Plastics Inc. in a nearly half-billion-dollar deal that adds a manufacturing site near Milwaukee.
Silgan is paying $485 million for Gateway and its 350,000-square-foot facility in Mequon, Wis. Gateway is expected to have about $150 million in sales this year along with $46 million in adjusted earnings before interest, taxes, depreciation and amortization.
"This acquisition further expands our comprehensive product offering in dispensing and specialty closures and provides further growth opportunities with many of our existing and shared customers." Silgan CEO Adam Greenlee said in a statement. "We believe Gateway's advanced automation platform can be leveraged across much of Silgan's manufacturing footprint."
Gateway began operations in 1970 and will be "slightly accretive" to earnings this year with more expected next year, Stamford, Conn.-based Silgan said.
Silgan said the deal will include some tax benefits of approximately $90 million and the new owner expects to save about $2 million within the next year through greater buying power.
Silgan is borrowing money through its senior secured credit facility to fund the acquisition.
"Gateway has existing capacity for growth as it is very well capitalized with state-of-the-art equipment and market-leading capabilities," Greenlee said.
Gateway's strengths include in‑house packaging design, tooling, mold construction and secondary operations such as assembly, warehousing and distribution. Key markets are food packaging, pet care, chemicals and nutraceuticals.