Private equity firm targets leading player status in Euro rigid packing sector
The buyout specialist is convinced the fragmented nature of the rigid packaging industry in Europe presents it with strong prospects for expansion – both organically and through acquisitions.
The European division of US-based Sun Capital Partners completed the €52m takeover of the Huhtamaki’s rigid packaging operations days before Christmas. The newly acquired facilities include rigid plastic consumer facilities in Hämeenlinna, Finland; Auneau, France; Siemianowice, Poland; and Istanbul, Turkey.
The firm sees the deal as a platform for further growth given both the strong nature of the its new business, which already supplies food containers to Danone and Nestle, and the characteristics of the European industry as a whole, Scott Edwards, principal at Sun European Partners, told FoodProductionDaily.com.
“In Europe we see a rigid packaging industry that is a growing but is also reasonably fragmented and we believe there is a chance to increase market share,” he added. “We see Huhtamaki as an opportunity to further augment our food packaging portfolio across Europe and it offers an exceptional fit with our existing portfolio investments.”
The company also owns US-based flexible packaging outfit Exopack, which recently expanded after the takeover of two meat and cheese plants from Bemis, as well as France-based cosmetic packaging company Albea and Reuther in Germany.
Leading player
Sun said around half of its total $5bn funds are available for acquisitions across all industry segments and it was committed to seeing growth.
Michael Kalb, head of international investments at the company, said the packaging industry was one sector with major growth potential.
“We see opportunity in Europe to grow our presence in the packaging industry both organically and through acquisitions to become a leading rigid packaging player in the region,” he said. “We like the dynamics that are visible in this segment where there is opportunity to consolidate a fragmented industry. We plan to take advantage of those dynamics.”
Consolidation
Edwards believes packaging customers would benefit from a more consolidated and therefore sophisticated rigid packaging sector. Fewer and larger companies would offer more advanced product offerings and superior capitalisation. He added he had already seen a similar trend in the flexible packing segment.
“Customers would like a smaller number of companies that are well-capitalised and which can offer product solutions on a pan-regional basis,” said Edwards.
