MeadWestvaco acquires Saint-Gobain dispensing division

By Simon Pitman

- Last updated on GMT

Related tags Meadwestvaco Cosmetics

MeadWestvaco has signed a definitive agreement with France-based
Compagnie de Saint-Gobain to acquire Saint-Gobain Calmar, a global
manufacturer of plastic dispensing and spraying systems, for $710
million.

The cash transactionhas been approved by the board of directors of MeadWestvaco and is expected to close in the summer of 2006, providing global reach for MeadWestvaco's spraying and dispensing capabilities.

Calmar currently has a strong presence in key markets in the US and Europe, as well as emerging markets, the latter which should prove a particularly good step into some of the world's fastest expanding markets.

Calmar's customized pump and spray packaging solutions are used in a broad range of end uses, including personal care, cosmetic and fragrance sectors, together with pharmaceutical and other consumer goods applications as well as industrial applications.

"Calmar is led by a proven management team and the company has a history of superior customer service, unrivaled innovation, strong financial and operating performance, and market leadership,"​ said John Luke, chairman and chief executive officer of MeadWestvaco.

"This acquisition gives us solid footing in primary packaging, providing an excellent opportunity for MeadWestvaco to deliver a more comprehensive array of valuable packaging solutions to customers worldwide."

Calmar's revenue over the past 12 months was approximately $420 million with an EBITDA of $81 million and MeadWestvaco says that Calmar's management team will remain in place.

MeadWestvaco expects Calmar to have minimal impact on its earnings through 2006 and to be accretive to its earnings beginning in 2007. In 2005 the company had a sales turnover of $6.2bn, of which $4.45bn was packaging.

"Adding Calmar to our existing packaging platform expands our ability to meet our customers' global packaging needs, particularly in higher-growth emerging markets where companies are seeking a single partner to provide them with innovative and cost-effective solutions,"​ said Luke.

The buy particularly focuses on the company's expansions plans in the persona care, cosmetics, fragrance and pharmaceutical sectors, where Calmar is particularly strong, building on MeadWestvaco's personal care capabilities.

In 2005 MeadWestvaco's sales from packaging products were relatively steady compared to the previous years, but the company pointed out that strong sales for cosmetics packaging had helped to offset a decline in media-related packaging.

In February of this year MeadWestvaco announced a key restructuring programme for its business in an effort to increase its research and development capabilities and cut down on costs.

The comprehensive plans aim to strengthen the company's position as a global player on the global packaging market by consolidating the six key divisions within the business in to two.

Crucial to this aim will be an Innovation Center, to be based in Raleigh North Carolina, together with the consolidation of its US corporate headquarters in Richmond, Virginia.

The two re-focused division will comprise a Packaging Resources Group that will serve customers of the company's paperboard businesses, together with a new Consumer Solutions Group that will focus on providing consumer packaging solutions.

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