Castle Harlan has agreed to acquire a majority stake Pretium Packaging LLC, a Chesterfield, Mo.-based maker of specialty plastic containers for the food, pharma, personal-care and household markets. Company founder Keith Harbison will retain a minority position. As part of the deal, Pretium Packaging will acquire the parent of Novapak Corp. from Kirtland Capital Partners. The total transaction is valued at $200 million.
Castle Harlan, Inc., the New York private equity investment firm, announced today it had agreed to acquire Pretium Packaging, L.L.C., one of the country’s leading manufacturers of custom-designed specialty plastic containers for the food, pharmaceutical, personal-care and household markets.
In conjunction with the closing of the Pretium transaction, expected in the first quarter of 2010, Castle Harlan said Pretium will acquire PVC Container Corporation, the parent of Novapak Corporation, which also makes specialty plastic containers and has a product line and customer base that complement Pretium’s. The total transaction is valued at approximately $200 million. The transactions are subject to the satisfaction of various conditions.
Castle Harlan said the combined company, which will carry the Pretium name, will have annual sales of approximately $240 million and 14 manufacturing plants in the United States and Canada serving more than 500 customers.
Pretium is being sold by founder Keith Harbison, who will retain a significant minority stake as a partner in the company and sit on its board of directors. Pretium is based in Chesterfield, Missouri. Pretium’s management will continue to operate the company, along with certain members of Novapak’s management team.
Novapak, based in Eatontown, New Jersey, is being sold by Kirtland Capital, a Cleveland-based private equity investment firm.
George Abd, Pretium’s president and chief executive officer, welcomed the combination of what he called “these world class assets.”
The transaction, he said, “will allow us to give our customers, and the market in general, an unparalleled breadth of product offerings and innovative packaging designs with a strong and shared cultural focus on quality, service and value.”
He also praised Castle Harlan’s “long history of partnering with management teams to realize shareholder value through superior customer service.”
William Pruellage, the Castle Harlan senior managing director who led the firm’s negotiating team, said the acquisition was a “win-win deal all around.”
“There is very little overlap in customers between the two companies, which will enable Pretium to offer a broader range of products and services to an existing customer base,” Pruellage said. “In addition, we see abundant opportunities for the combined company to expand its customer base geographically, and we believe management is energized to do that.”
Anand Philip, vice president of Castle Harlan, said, “We at Castle Harlan look forward to working closely with Pretium and Novapak to help spur their growth in the years ahead. We are confident that the combined platform has significant opportunities for expansion on top of a stable existing base business.”
Castle Harlan, founded in 1987, invests in controlling interests in the buyout and development of middle-market companies in North America and Europe. Its team of 19 investment professionals has completed 50 acquisitions since its inception with a total value in excess of $9 billion. Castle Harlan currently manages investment funds with equity commitments of $2.5 billion. The firm traces its roots to the start of the institutionalized private-equity business in the late 1960s.
Castle Harlan’s current portfolio companies, which employ more than 42,000 people, include Ames True Temper, the manufacturer of lawn and garden tools and accessories, Baker & Taylor, the world’s largest distributor of books and entertainment products to libraries and retailers, and Associated Packaging Technologies, Inc., the leader in specialty packaging for the frozen food industry.