Sun Capital merges five portfolio companies

Ellie Pullen
03 May 2013

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Sun Capital has announced plans to combine five of its US and European plastic packaging businesses to create Luxembourg-based Exopack Holdings Sarl, the sixth largest company of its kind worldwide.

The five companies, all backed by Sun Capital, are Exopack - which is based in the US - and Britton Group, Paccor, Kobusch and Paragon Print & Packaging in Europe. The companies will continue to trade under their own brand names.

The newco's management team will include Jack Knott as chief executive officer and Mike Alger as chief financial officer. Dieter Bergner will become CEO of the global rigid division of Exopack Holdings, which operates under Paccor, and Micheal Cronin will become CEO of the newco's global flexibles division.

Collectively, the businesses operate 63 plants, employ 8,650 staff and have aggregate revenues of more than $2.5bn, making the newco the world's sixth largest plastics packaging company.

Exopack is a US-based developer and manufacturer of paper and plastic flexible packaging and engineered coatings. It was founded in 2001 and is headquartered in Spartanburg, South Carolina.

Sun Capital acquired the business in 2005 from The Sterling Group, a Houston-based GP, in a secondary buyout. Two of Sun Capital's existing portfolio companies, Cello-Foil Products and The Packaging Group, were then made subsidiaries of Exopack by the private equity firm.

Britton Group, which is headquartered in Cheshire, UK and produces flexible packaging brands such as Duralite and Flexlite, was acquired by Sun Capital's European branch, Sun European Partners, from HSBC's private equity arm for a reported £90m in 2011. Sun Capital then merged Britton Group with two of its existing portfolio companies, Reuther Verpackung GmbH & Co. KG and the flexible packaging division of Veriplast Solution, to create a new, pan-European Britton Group.

The group has had a string of private equity owners, having been acquired by HSBC in a £77m secondary buyout from LDC in 2008. At the time of Sun Capital's purchase, the group reported turnover of around £125m. Its revenues in 2012 stood at €400m (£338m) and the company currently employs 1,800 staff.

Sun European Partners followed a similar pattern after its acquisition of Germany-based Paccor in 2010, which spun out from Finnish packaging company Huhtamaki Group in 2009. Two of the GP's existing portfolio companies, Pannunion Packaging and the rigid packaging specialist arm of Veriplast Solution, were merged with Paccor in 2011 to become affiliates of the rigid packaging manufacturer.

Kobusch was acquired in 2011 by Sun Capital's European arm for €160m, in a trade sale from protective packaging firm Pregis Corporation. The company was founded in 1963 and its head office is located in Warburg, Germany. It provides packaging solutions for the food, chemical, hygiene product and medical sectors. Kobusch reported revenues of €211m and an EBITDA of €24.8m in 2011.

Paragon was established in Lincolnshire, UK in 1994, and was acquired by Sun Capital's European division in January this year. The enterprise value for Paragon stood at £150m, according to unquote" data. The company employs 1,400 staff and reported a turnover in excess of £170 for 2012. Its services include printed labels, sleeves and cartons.