Pactiv Corporation (PTV) agreed to acquire the stock of PWP Industries for $200 million. PWP is a leading manufacturer of APET (amorphous polyethylene terephthalate) disposable products. The deal is expected to close in the first quarter of 2010.
PWP primarily manufactures a range of APET foodservice containers for several channels, including packer processor bakeries, supermarkets and quick service restaurants. It operates three manufacturing facilities in the United States, as well as a facility that processes post consumer PET.
Pactiv expects this acquisition to be accretive to its earnings and free cash flow in 2010. With this acquisition, Pactiv has further strengthened its position in APET, which according to the company is a fast growing material in the foodservice market due to its outstanding functionality, particularly its freezing capability, as well as its recyclability.
Share Repurchase Authorization
In a separate announcement, Pactiv announced that its board of directors has increased its share repurchase authorization by 10 million shares of its common stock. This, along with the remainder of the prior authorization, brings the total share repurchase authorization to 10.5 million.
Pactiv Corporation is a leader in the consumer and foodservice/food packaging markets it serves. With 2009 sales of $3.4 billion, Pactiv derives more than 80 percent of its sales from market sectors in which it holds the No. 1 or No. 2 market-share position. The company’s competitive advantage lies in its strong brand equity among consumers and new product launches. One major competitor is Sealed Air Corporation (SEE).
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