(Corrects spelling of company to Paccor from Paccar in the
By Michael Erman
NEW YORK May 1 Private equity firm Sun Capital
Partners plans to merge five of its plastic packaging portfolio
companies to form what it says will be the sixth-largest plastic
packaging company in the world.
The new company, which will be called Exopack Holdings Sarl,
will be created by merging its Exopack, Kobusch, Britton,
Paragon and Paccor businesses, the company said in a filing with
U.S. regulators on Wednesday.
The combined revenue of all the companies was around $2.5
billion in 2012, Exopack said. The deal will generate annual
savings of around $65 million from efficiencies generated in its
back office, manufacturing and global procurement operations, it
The companies had around $255 million in total EBITDA last
year, Jack Knott, who will be chief executive of the new
Exopack, said in an interview. That would translate to around
$319 million after the cost savings, he said.
"This gives us a lot of optionality that we didn't have
before," Knott said. "It gives us optionality to continue to
grow through acquisitions in different geographies and different
market segments. It gives us optionality to continue to invest
in organic growth, which we've done quite well in."
Knott said the larger company will also give it more options
in raising capital for the new company.
The deal will combine packaging businesses with operations
in Europe and the Middle East with Exopack, which was previously
focused on North America. It will create a company with 63
plants and 8,650 employees
The new Exopack will be based in Luxembourg.
Knott expects the extended geographic reach will help it
with its largest customers, who include global companies such as
Procter & Gamble Co and Unilever Plc.
Sun Capital bought Exopack in 2005 and picked up the other
four companies over the last three years.
Scott Edwards, a Sun Capital managing director, said the
move should help the private equity firm's eventual exit from
"Size in this industry is very helpful. It certainly
enhances exit possibilities no matter what route you want to
take," he said.
The merger is subject to Exopack receiving amendments to its
term loan and another facility from GE Capital.
(Reporting By Michael Erman. Editing by Andre Grenon)