Pactiv Corporation has agreed to pay $200 million for the stock of PWP Industries, an HPC company which manufacturers APET (amorphous polyethylene terephthalate) disposable products for use by packer processor bakeries, supermarkets and quick service restaurants.
PWP’s 2009 sales were approximately US$140 million. The move is expected to be ‘modestly accretive’ to earnings per share and free cash flow in 2010, and generate a return in excess of Pactiv’s cost of capital within two to three years.
The transaction is due to close in the first quarter and is subject to normal regulatory approvals.
PWP has three manufacturing sites in the USA and also processes post consumer PET. The company employs some 600 people.
“The acquisition will allow us entry into a multi-year contract with Coca-Cola Recycling LLC for the supply of plastic bottles to make post consumer recycled PET for containers,” said Richard L. Wambold, chairman and chief executive officer of Pactiv Corporation.
