NEWS ?????
Goldman, JPMorgan Sell Berry Plastics To New PE Owners
By Matthew Monks
Of DOW JONES NEWSWIRES
NEW YORK -(Dow Jones)- Goldman Sachs Capital Partners and JPMorgan Partners
have agreed to sell container top maker Berry Plastics Corp. for $2.25 billion.
The deal returns three times the buyout shops' money, a person familiar with the
matter said.
New majority owner Apollo Management LP (AOOR) and its minority co-investor
Graham Partners will be the company's third set of private equity owners in four
years once the deal closes, expected by the end of the third quarter.
Apollo is familiar with the sector, having recently closed the $975 million
buyout of Tyco International Ltd.'s (TYC) plastics and adhesives unit, Covalence
Specialty Materials Corp. Apollo also owns Hexion Specialty Chemicals Inc.
(HXN), which has a plastics division.
Joshua Harris, a founding partner of Apollo, said in a statement that Berry
Plastics is "a true franchise business and one of the best positioned, highest
margin specialty packaging businesses in the industry."
Harris added that Apollo will be looking to "successfully implement Berry's
proven growth strategy in the years to come."
The Evansville, Ind., company has extended its market share in the last three
years by snatching up a number of smaller container companies, including rival
plastics maker Kerr Group Inc. and the molded assets of both Euromex Plastics
S.A. de C.V. and APM Inc. In 2005, it posted revenue of $1.17 billion, up from
$814.2 million in 2004.
Goldman Sachs and its affiliates invested $268 million of equity when they
took control of the company from First Atlantic Capital Ltd., regulatory filings
show. JPMorgan had been a previous investor in Berry Plastics and held onto a
29% stake. It's not clear how much equity JPMorgan has invested in the business.
Berry Plastics announced in early April that it had hired its owner's parent
companies, Goldman Sachs & Co. (GS) and JPMorgan Chase & Co. (JPM), to explore
an initial public offering or a sale. The company, which makes plastic cups,
lids, and bottles for products like shampoo and prescription drugs, had a number
of PE suitors, including Bain Capital, Blackstone Group, and Thomas H. Lee
Partners.
The fact that its owners opted for a sale rather than an IPO indicates the
favorable valuations sellers are finding for their businesses in the private
markets lately.
A few other private equity firms recently opted to sell their portfolio
companies rather than take them public. Carlyle Group pulled plans to take
Rexnord Corp. public last month, agreeing to sell the power transmission parts
maker to Apollo for $1.825 billion. And One Equity Partners scrapped Progress
Rail Services' pending IPO in favor of a sale to Caterpillar Inc. (CAT).
Apollo declined to comment; all the other primary parties involved in the deal
didn't return calls.
-By Matthew Monks, Dow Jones Newswires/LBO Wire; 201-938-4291;
matthew.monks@dowjones.com
(END) Dow Jones Newswires
06-28-06 1939ET
Copyright (c) 2006 Dow Jones & Company, Inc.- - 07 39 PM EDT 06-28-06
