Packager sells US operations to focus on Europe, Asia
packing operations, that include personal care packaging, so as to
focus on expanding its European and Asian operations.
SCA said yesterday it has agreed to sell the operations to US investment firm Metalmark Capital for$400m (€308m) in cash. SCA's North American operations supply protective, consumer andtemperature-assurance packaging. The operations employ 2,100 staff and account for 10 per centof SCA's total sales. The deal is expected to close during the first quarter of 2007.
Armed with a fistful of cash, the company aims to expand its range of packaging products itoffers in Europe and Asia, potentially offering processors more competitively-priced supplies.
Company chief executive Jan Aastroem said the company is pursuing a strategy of focusingon growth opportunities in eastern Europe, China, and the Asian regions. Eastern Europe is the fastest growing packaging areaon the continent, he said in a telephone conference call yesterday to discuss the sale.
He said that SCA's packaging unit sales in China were up 20 per cent year-on-year.
"SCA's strategy is to become a full service provider of packaging solutions in Europe and China,"he said.
SCA, based in Sweden, has annual sales of about $15 billion and employs 50,000 people in 50countries. Overall packaging accounts for 33 per cent of the company's sales, personal care products another 20 per cent, tissue 32 per cent and forest products 15 per cent.
Before the sale, SCA's ten largest markets are Germany, the UK, the US, France, Sweden, Italy, the Netherlands, Spain, Denmark and Australia.
The company's ThermoSafe division offers customers insulated packaging and temperature monitoring for a variety of temperature sensitive products, many of which are food and beverage products.
Metalmark Capital is a private equity firm. The firm was founded to manage the Morgan StanleyCapital Partners private equity funds, on a subadvisory basis, and the Metalmark Capital privateequity funds.
It is not the first time the firm has invested in packaging. In 1989 Metalmark bought 50 per centof Jefferson Smurfit Corp. In 1998, Jefferson Smurfit Corporation and Stone Container Corporation merged to form Smurfit-Stone ContainerCorp., which became a publicly-traded company on the Nasdaq.
