Amcor to acquire a leading manufacturer of speciality containers
The business has six production sites in the United States and one in Canada, and generates annual sales of approximately US$210 million. These facilities service attractive sub-segments in the personal care and specialty food markets and the business brings strong, long standing relationships with leading multinational and large domestic customers.
Over many years Amcor Rigid Plastics has built a position in the specialty container segment through its Diversified Products business, by developing capabilities in house and acquiring specialised technologies. This acquisition will significantly enhance Amcor's product offering by adding complementary capabilities and technologies, including more extensive extrusion blow molding and injection technologies, expertise in producing polyethylene, polypropylene and multi-layer containers, as well as additional decorating capabilities.
Total sales of specialty containers in the Diversified Products business will be approximately US$750 million inclusive of the acquired business, and there are significant opportunities to build on this position with organic growth and further acquisitions.
Inclusive of synergy benefits of approximately US$20 million and underlying market growth, this acquisition is expected to add approximately US$50 million of PBIT to Amcor's Rigid Plastics segment at the end of the third full year of ownership (FY2020). Additional growth opportunities underpinned by a broader product offering will further enhance returns on this acquisition beyond that timeframe.
Amcor CEO and Managing Director Ron Delia said: "The Amcor Rigid Plastics business has significant growth opportunities, including in segments outside of the traditional non-alcoholic beverage markets. Part of our strategy to grow this business includes acquiring specialised manufacturing capabilities which unlock further growth in key segments.
This acquisition represents the next step change for Amcor in terms of scale and capabilities for specialty container manufacturing. Along with providing synergies, the acquired business also brings strong relationships with important new customers, strengthens our product platform and positions this business to grow faster than the overall market."
The acquisition remains subject to regulatory approvals in the United States.