Bemis Company Inc. (BMS) signed an agreement to sell its facilities located at Menasha, Wisconsin and Catoosa, Tulsa to Exopack Holding Corp. The two facilities are engaged in the production of plastic packaging for natural cheese and shrink bags for fresh red meat. They together generate about $100 million in annual revenue.
Based in Spartanburg, South Carolina, Exopack is an affiliate of private equity firm Sun Capital Partners Inc. of Boca Raton, Florida. It is a manufacturer of paper and flexible packaging, and specializes in substrate development, film extrusion, printing, lamination, and conversion of flexible packaging products.
Subject to certain post-closing adjustments, Bemis has agreed to sell the facilities at approximately $81 million, payable in cash. The terms of the transaction are yet to be disclosed.
Under the terms of the order signed by the U.S. District Court for the District of Columbia, Bemis was required to divest the two facilities, which were part of its Alcan Packaging Food Americas’ acquisition. Bemis acquired Alcan Packaging, a business unit of Rio Tinto plc. (RTP) on Mar 1, 2010. Under the terms of the $1.2 billion transaction of acquisition of Alcan Packaging, Bemis acquired 23 flexible packaging facilities of Alcan in the U.S., Canada, Mexico, Brazil, Argentina and New Zealand.
Bemis’ annual net sales are expected to increase to approximately $5.2 billion, excluding the $100 million in sales from the plants to be divested due to the transaction. Nearly 70% of the company’s total net sales are anticipated to come from resilient food packaging, up from 57% before the deal.
The acquisition is expected to complement Bemis manufacturing capabilities and technological expertise. During the next two years, we expect the company to generate a strong cash flow, which it can invest in growth opportunities and for diligent debt repayment.
Founded in 1858, Neenah, Wisconsin-based Bemis is a manufacturer of flexible packaging products and pressure sensitive materials sold primarily to the food industry. The company also sells its products to other customers in the chemical, agribusiness, medical, pharmaceutical, personal care, electronics, automotive, construction, and graphic industries. Bemis employs over 20,000 individuals in 84 manufacturing facilities in 13 countries around the world.
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