Rigid packaging supplier in the US Silgan Holdings has completed the acquisition of Portola Packaging in a transaction worth $266m.
Portola Packaging operates eight facilities in North America and Europe which produce plastic closures. The company achieved sales of approximately $200m in 2012.
Silgan executive vice president and chief financial officer Bob Lewis said that the acquisition will expand the company's global closure franchise.
"Portola has a strong reputation as an innovator in closure design and operational leadership," Lewis added.
The acquisition offers Silgan an opportunity to expand its relatively small European plastic closure presence through Portola's manufacturing facilities located in the Czech Republic and the UK.
Silgan has funded the purchase price for the acquisition by revolving loan borrowings under its senior secured credit facility. Due to the impact from the write-up of inventory under purchase accounting, the acquisition is expected to be slightly dilutive to earnings in 2013. Thereafter, it is expected to be slightly accretive to earnings initially, becoming more accretive as synergies are phased in over the eighteen months following the transaction.
Silgan supplies rigid packaging for shelf-stable food and other consumer goods and distributes metal, composite and plastic closures for food and beverage products. The company reported 2012 sales of approximately $3.6bn.
Image: Silgan acquires plastic closures manufacturer Portola Packaging. Image: courtesy of foto76/ FreeDigitalPhotos.net.