09.13.15
Earlier this month, the company formerly known as PGI shocked the industry when it announced it would be purchased later this year by Berry Plastics. PGI and Berry share many of the same customers in the hygiene space, and Berry cited these synergies as well as
PGI’s global profile as top reasons why it decided to buy the world’s largest nonwovens producer.
For more than 20 years, PGI has been known in the industry for its aggressive investing and acquisition strategies, and the company has weathered a number of ups (state-of-the-art technology, a truly global manufacturing footprint) and downs (a 2002 bankruptcy filing) before finally being crowned the world’s largest producer of nonwovens in 2014 (see page 34 for more on PGI’s exploits).
Until the acquisition announcement, it seemed like PGI, which changed its name to Avintiv Specialty Materials in June 2015, was heading in the direction of an initial public offering. The industry had been buzzing about this possibility this since the company was purchased by equity investor Blackstone in 2011 and earlier this year paperwork was even filed. However, an IPO was not to be. Instead, PGI will become a publicly traded entity under the auspices of a larger publicly traded company, Berry Plastics, which will actually become a Fortune 500 company after adding PGI’s $2 billion business to its coiffeurs.
From an industry standpoint, it is nice to see that such a large company finds this completely nonwovens-based company attractive enough to purchase. Berry already supplies plastic films to many of PGI’s customers in the hygiene market, and executives hope the acquisition will help expand its role both into new areas of the hygiene market and also new geographies—with plants in the Americas, Europe and China, PGI is a significantly more global company than Berry, which sells about 98% of its products in North America.
Now, we are left to wonder what is next for PGI? What does Berry Plastics plan to do with its latest business? It is clear that the company’s largest spunmelt business will up the company’s exposure to companies like Procter & Gamble, Kimberly-Clark and SCA and the integration of the plastic-based businesses will surely up Berry’s purchasing power among polypropylene brokers. But, what about all of PGI’s businesses outside of hygiene—like the $400 million business it acquired from Fiberweb not too long ago or the sophisticataed filtration media is launched just last year? Hopefully, Berry will be glad to diversify its business and focus on growing these high margin and high innovation businesses. There are a lot of innovative products in that portion of PGI’s business and it would be a shame to see them be ignored.
As always, we appreciate your comments.
Karen McIntyre
kmcintyre@rodmanmedia.com
PGI’s global profile as top reasons why it decided to buy the world’s largest nonwovens producer.
For more than 20 years, PGI has been known in the industry for its aggressive investing and acquisition strategies, and the company has weathered a number of ups (state-of-the-art technology, a truly global manufacturing footprint) and downs (a 2002 bankruptcy filing) before finally being crowned the world’s largest producer of nonwovens in 2014 (see page 34 for more on PGI’s exploits).
Until the acquisition announcement, it seemed like PGI, which changed its name to Avintiv Specialty Materials in June 2015, was heading in the direction of an initial public offering. The industry had been buzzing about this possibility this since the company was purchased by equity investor Blackstone in 2011 and earlier this year paperwork was even filed. However, an IPO was not to be. Instead, PGI will become a publicly traded entity under the auspices of a larger publicly traded company, Berry Plastics, which will actually become a Fortune 500 company after adding PGI’s $2 billion business to its coiffeurs.
From an industry standpoint, it is nice to see that such a large company finds this completely nonwovens-based company attractive enough to purchase. Berry already supplies plastic films to many of PGI’s customers in the hygiene market, and executives hope the acquisition will help expand its role both into new areas of the hygiene market and also new geographies—with plants in the Americas, Europe and China, PGI is a significantly more global company than Berry, which sells about 98% of its products in North America.
Now, we are left to wonder what is next for PGI? What does Berry Plastics plan to do with its latest business? It is clear that the company’s largest spunmelt business will up the company’s exposure to companies like Procter & Gamble, Kimberly-Clark and SCA and the integration of the plastic-based businesses will surely up Berry’s purchasing power among polypropylene brokers. But, what about all of PGI’s businesses outside of hygiene—like the $400 million business it acquired from Fiberweb not too long ago or the sophisticataed filtration media is launched just last year? Hopefully, Berry will be glad to diversify its business and focus on growing these high margin and high innovation businesses. There are a lot of innovative products in that portion of PGI’s business and it would be a shame to see them be ignored.
As always, we appreciate your comments.
Karen McIntyre
kmcintyre@rodmanmedia.com