Deal helps Berry diversify from food packaging into speciality medical materials
US-headquartered Berry Plastics has agreed to buy compatriot Avintiv for around $2.5 billion (£1.6 billion). The move allows Berry to diversify from its main activity in food packaging and expand into medical and healthcare materials such as non-woven materials for wipes and filtration, as well as absorbents for nappies and feminine hygiene products.
Avintiv (formerly known as PGI Specialty Materials) is almost entirely owned by private equity group Blackstone. The business has recorded net losses for the last four years, with interest payments on debt raised to fund acquisitions contributing significantly to those losses. The deal has been negotiated on a cash-free, debt-free basis, meaning Avantiv’s existing debts will be paid off on completion of the transaction. Berry also expects to be able to make annual operational savings of $50 million.