Posts Tagged ‘Ahmed Fahour’

  • Pro-Pac in $60m double acquisition

    ASX-listed Pro-Pac Packaging Group (PPG), chaired by former Australia Post boss Ahmed Fahour, will raise $59.8 million to buy Victoria-based Perfection Packaging and NZ company Polypak.

    Pro-Pac has agreed to pay $49.8 million for flexible packaging manufacturer Perfection, which employs 100 staff at its 6,000 sq. metre factory in Dandenong South in Melbourne’s south-east. Polypak, a soft flexible packaging manufacturer and distributor based in Auckland, will be acquired for $NZ8.8 million.

    ‘A significant milestone’: Ahmed Fahour, chairman, PPG.

    “The acquisitions of Perfection Packaging (Aust) and Polypak (NZ) represent a significant milestone in PPG’s vision to become the flexible and industrial packaging manufacturer and distribution leader in Australia and New Zealand,” PPG chairman Ahmed Fahour told the ASX. “I take this opportunity to thank existing shareholders for their continued support and to welcome a number of new institutional and retail shareholders to the PPG register as we begin this journey.”

    Principals of Polypak and Perfection Packaging will stay on with PPG and integrate into PPG leadership and operations teams.

    The deals will be funded by a capital raising that will include: a $55.8m two tranche fully underwritten placement at $0.34 per share; and a $4.0m fully underwritten Share Purchase Plan at $0.34 per share. $9.96m of PPG shares will also be issued to Perfection Packaging vendors at $0.39 per share. 

    Major PPG shareholder Bennamon, Fahour and non-executive director Rupert Harrington will “participate in placement to maintain their current level of shareholding and conditional on shareholder approval.”

    Perfection Packaging, Dandenong South, VIC.

    Perfection Packaging, established in the 1970s, has a forecast production of 80 million meters a year of printed laminate ‘hard flexible’ primary packaging. Its manufacturing infrastructure was expanded earlier this year to now include five printing presses, three laminators and five slitters.

    The Polypak plant in Glenfield, Auckland.

    Polypak, established 1978, is specialist soft flexibles packaging manufacturer and distributor of high-quality polyethylene bags, film and tubes, supplying mainly primary food processors including meat, poultry & fish markets, via its production plant in North Harbour, Auckland, where it employs 28 people.

    PPG says the acquisitions will: provide an entry into the larger hard flexibles segment; deliver significant cost synergies to consolidate its Australian manufacturing network; open access to new markets and products complementing the existing business; increase the diversification of revenues, geographies and customers; and strengthen PPGs leadership and operations teams.

    In September 2017, PPG signed a $177.5 million merger deal with flexible packager Integrated Packaging Group (IPG), the third-biggest flexible packaging manufacturing company in Australia. The combined business was projected to have annual sales of more than $450 million.

    ‘A period of substantial transformation’: Grant Harrod CEO PPG

    In a trading update this week, PPG says it expects to generate earnings before tax of between $34m-$35m in FY18, and between $46m-$47m in FY19 – subject to no adverse market conditions.

    “The FY18 year has been a period of substantial transformation as the company establishes itself as a leader in the industrial and flexible packaging sector,” says PPG CEO Grand Harrod. “The company is now very well advanced in the integration of the IPG acquisition it completed recently and will further benefit from both synergy savings and new growth opportunities with the Perfection Packaging and PolyPak acquisitions. Both acquisitions further strengthen our growth strategy, in particular our reach into the higher growth food based primary packaging market.”

    The Polypak deal is due to be settled later this week, while the acquisition of Perfection Packaging is scheduled to be completed on 6 September.