Posts Tagged ‘Pro-Pac’

  • 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.

  • Pro-Pac picks up Eco in food packaging expansion

    Pro-Pac Packaging Australia is making further moves into the local food packaging industry, picking up the business and assets of Eco Food Pack Australia, with the Sydney-based packaging business set to be rolled into Pro-Pac’s existing infrastructure. 

    In an announcement published on 19 June, the publically listed packaging company told shareholders that Eco Food Pack Australia (Eco) has experienced high sales growth and market acceptance over a relatively short period of time, with current annualized revenues standing at around AU$12 million.

    In a statement, Pro-Pac said:

    Eco’s expertise and products are a natural extension to PPG’s existing product and customer base in the food industry…Eco will be relocated and integrated into PPG’s existing infrastructures. This will provide distribution synergies for the business as well as enhanced customer service for the customers.

    It is unclear whether job losses will result from the consolidation of the two businesses.

    For Brandon Penn, Pro-Pac CEO, the acquisition is further step for the company into the local food packaging industry.

    “The purchase of the Eco business is a strategic acquisition into the food packing industry and provides a very good fit for our business and customer base to broaden the product range into a market segment that we are focusing on,” he said.

    The acquisition is part of a larger expansion program by Pro-Pac that saw the company finalise the purchase of Sydney’s Australian Flexographic Printers and Adelaide’s Poly Products Co. earlier this month.

    That deal is set to see Australian Flexographic Printers’ business and assets rolled into Poly Products’ Regency Park premises in South Australia.