Silgan,a supplier of rigid packaging for consumer goods products,has entered into an agreement to buy Rexam's plastic thermoformed food business for$250m.
Rexam's plastic thermoformed food business provides thermoformed packaging solutions such as retortable bowls and barrier trays to many of the world's leading packaged food and ready-meal companies.Its revenue in 2012 is expected to total approximately$100m.
Silgan president and CEO Tony Allott said the business is positioned for the growing demand in the ready-meals market through its low cost technology,which meets the rigorous requirements of the shelf-stable food market.
"The ability to provide our existing customers with product line extensions that offer convenient,on-the-go capabilities makes it an excellent fit within the Silgan suite of products,"Allott added.
The transaction is expected to be neutral to Silgan's earnings in 2012 primarily due to the initial write-up of inventory required for accounting purposes,and modestly accretive to earnings in 2013 based on current growth expectations.
The deal,which is subject to certain customary conditions and regulatory approvals,is expected to close in the third quarter of 2012.Silgan expects to fund the purchase price from cash on hand.
