Sun Capital merges Paragon, Britton into new global plastics giant
Sun Capital has revealed plans to merge five businesses, including Paragon and Britton Group, into a single company that will be the world’s sixth-largest plastic packaging group.
The business will be headquartered in Luxembourg and will comprise Britton Group, Paragon Print & Packaging, Paccor, Kobusch and Exopack, creating a plastics business with both rigids and flexibles, turnover of around $2.5bn and EBITDA profits of around $255m.
Exopack Holdings, as the group will be known, will be split into two main operating segments, a rigids division and a flexibles division, and will have 63 facilities and more than 8,600 employees. The move comes after a recent investment spree in the packaging sector by Sun Capital Partners to create the group. Sun acquired Paragon Print & Packaging, the UK’s biggest label printer, last December and bought flexibles specialist Britton Group in April 2011. Sun then bought flexibles business Kobusch-Sengewald from Pregis in October 2011.
Paccor is the second-largest rigid plastics business in Europe, while Exopack, which Sun Capital bought in 2005, is a major player in flexible packaging and is based in North America.
All five companies will continue to trade under their individual brand names. Jack Knott, who currently leads Exopack, will be chief executive of the consolidated group.
Speaking today, he told Packaging News that the merger of the businesses and the resulting scale would create new “optionality” for both customers and the business itself. “It creates a company with no impediments,” he said. “It gives us a broader global footprint and a manufacturing platform that can meet the requirements of the global consumer goods companies. “It also will allow us to find and roll out innovations and gives us the ability to drive best practice in the manufacturing platform.” He added that the company would continue to seek growth through acquisition, through further investments in its manufacturing base and through the roll-out of successful business models – such as Paragon’s label business in the UK – to other parts of the world.
A statement to the US Securities and Exchange Commission yesterday said that the merger would allow the consolidated group to make annual cost savings of some $65m across back-office, procurement and manufacturing. The statement said the consolidation would create other benefits including greater product and technology breadth that would allow the group to increase its market share; a global platform that would help grow share with the major multinational FMCG groups; and the ability to drive best practice across its manufacturing network.
Michael Cronin, a veteran of the Alcan business who most recently hit the headlines when he joined SCA in early 2010, will join the business as chief executive of the flexibles division while Dieter Bergner will be chief executive of Paccor.