Soteria Flexibles makes second acquisition with film extruder Redi-Bag

Soteria Flexibles Holdings has purchased Redi-Bag Inc., a Tukwila, Wash.-based blown film extruder and converter.

The deal is the second acquisition of a custom film specialist for Soteria Flexibles, a portfolio company owned by French private equity firm Ardian.

Soteria Flexibles was established in 2019 in conjunction with Ardian's investment in Colonial Bag Corp., a Carol Stream, Ill.-based custom film extruder.

"With Redi-Bag, we saw an immediate fit with Colonial," Bradley Herbolsheimer, CEO of Soteria Flexibles, said in a telephone interview. "It has one facility with great bones and a lot of room for expansion outside Seattle."

Herbolsheimer said Redi-Bag's great customer relations and management team headed by President Athos Ikonomou stood out during the acquisition process.

"Redi-Bag is known for high quality and high service," Herbolsheimer said.

Terms of the deal were not disclosed. Mesirow Financial of Chicago acted as exclusive financial adviser to Redi-Bag. The seller was Traverse Pointe Partners LLC, a Chicago-based investment firm that has owned Redi-Bag since June 2017.

Redi-Bag makes low density polyethylene film and protective packaging, primarily for the food packaging market in the Pacific Northwest. The company was founded in 1992 by Jim and Dan Ulrich. Key markets include seafood and produce packaging.

Ardian, which also owns Novi, Mich.-based injection molder Revere Plastics Systems Inc., made its first move in film packaging in September 2019 when it bought Colonial Bag.

Just a few months later, when much of the global economy was hit by shutdowns and supply chain issues from the COVID-19 pandemic, Colonial Bag stayed open, Herbolsheimer said.

"Because 60 percent of what Colonial makes was health care-related products, we saw really strong demand throughout the pandemic. We were able to weather the storm and expand into other regions, because our products were in high demand," Herbolsheimer said.

In fact, Colonial Bag expanded during the pandemic, with a multimillion-dollar investment that included commissioning a new extrusion line. Colonial Bag now has 17 extruders and infrastructure ready to add three more, he said.

"Throughout the pandemic, we saw that we were oversubscribed in our demand. We needed to add capacity," Herbolsheimer said. "We are on the pathway to double our extrusion output."

All of Colonial Bag's extrusion lines are tailored to make custom products, he said.

In late 2020, Soteria Flexibles was introduced to Redi-Bag.

"There were some markets that we both touched. We saw a lot of similarities; [we] both make custom products. We saw real immediate fit," Herbolsheimer said.

Redi-Bag has about half as many extruders as Colonial Bag. Herbolsheimer declined to provide sales or employment numbers for either company.

Both Colonial Bag and Redi-Bag will continue to operate under their existing names.

Vincent Fandozzi, managing director and head of North American direct buyouts at Ardian, said that while the flexible packaging sector has seen a lot of consolidation, there's still room for a company like Soteria Flexibles.

"We have a lot of history in the flexibles around plastics. We know there's a lot of consolidation going on. That's fine," Fandozzi said. "[Big companies] are great at serving the large companies with large volumes. What we recognize is there is a need to be able to serve smaller customers and also large customers with smaller SKUs. That piece was missing. We see that need."

Herbolsheimer said Soteria Flexibles will keep its focus on smaller volumes of highly customized products, but with the scale that comes from a larger company.

"Many of our customers are national but look to produce regionally," Fandozzi said.

Soteria Flexibles is still in acquisition mode, the officials said.

"We as a leadership team, an investment team, we don't have any defined exit plans. We really feel like our journey has just begun," Fandozzi said.