| NEW YORK
NEW YORK May 13 BWAY Corp, one of the largest
makers of rigid metal and plastic containers in North America,
is considering a sale that could fetch around $2 billion, less
than two years after it changed private equity ownership, people
familiar with the matter said on Tuesday.
A potential sale of BWAY would be the latest in a wave of
deals in the industrial and consumer packaging sectors as a
modest economic recovery spurs private equity firms to seek out
companies in this space with strong cash flows and high barriers
Platinum Equity LLC, which acquired BWAY from private equity
peer Madison Dearborn Partners LLC in November 2012 for $1
billion, has met with banks recently to discuss selling the
packing company later this year, the people said.
Platinum is in the early stages of contemplating an exit and
has yet to begin a process of finding a buyer, the people added,
asking not to be named because the matter is not public.
Representatives for Platinum Equity could not be immediately
reached for comment.
Launched in 1875 as maker of pie tins and other household
items, Atlanta-based BWAY now manufactures products from steel
and plastic that are used in the packaging of paint, automotive
additives, food and household goods.
BWAY generated net sales of $1.4 billion and earnings before
interest, tax, depreciation and amortization of $190.5 million
in 2013, according to the company's latest annual report.
BWAY added to its debt pile to fund a $239 million dividend
to Platinum last year, allowing it to recoup most of the $267.4
million the private equity firm invested in the $1 billion
leveraged buyout of the company in 2012, according to Moody's
Investors Service Inc.
Madison Dearborn, which acquired BWAY in 2010 for $915
million from private equity firm Kelso & Co and public
shareholders, had also deployed the same "dividend
recapitalization" strategy of having the company borrow to pay a
Private equity firms tend to hold onto their investments for
an average of three to seven years. The quick flips seen in BWAY
have not been without controversy, with job cuts and plant
closures blamed by some on its aggressive use of debt to fund
acquisitions and pay out dividends.
(Reporting by Greg Roumeliotis and Soyoung Kim in New York;
Editing by Eric Walsh)