Pretium Packaging and Novapak Announce Plan to Merge

Jan 19, 2010, 14:30 ET from Pretium Packaging LLC

ST. LOUIS, Jan. 19 /PRNewswire/ -- Pretium Packaging LLC, a provider of custom blow molded packaging solutions with a primary focus in the food, pharmaceutical and personal care markets is partnering with Castle Harlan Inc., a New York-based buy-out firm, and existing Pretium management in connection with the merger of Pretium and PVC Container Corporation, the parent of Novapak Corporation, a portfolio company of Kirtland Capital, a Cleveland-based buyout firm.

The combined business will generate more than $240 million of blow molded bottle and injection molded pre-form sales to over 500 customers from 14 manufacturing facilities in the U.S. and Canada.  The new entity will retain the name Pretium Packaging, be headquartered in Chesterfield, MO, and be managed by the current Pretium management group together with certain members of the Novapak team.  The founder and current owner of Pretium, Keith Harbison, will be a significant minority shareholder in the combined business and a member of the company's Board of Directors.  Pretium is advised by Lazard Middle Market LLC. and Novapak is advised by Brown Gibbons Lang & Company.

Pretium's President and CEO George Abd stated, "We are very excited to realize the opportunity to put these two businesses together.  Both Pretium and Novapak have focused on small to medium volume, custom bottle applications. Much of both companies' recent growth has come in PET bottles.  The advantage for both companies' customers is that while Pretium has invested significantly in one-step, wide mouth PET technology and assets, Novapak has made significant investment in two-step, narrow neck PET and pre-form manufacturing.  The combination of these world-class assets and capabilities, will allow the merged company to offer our customers a full range of one-step and two-step PET bottles, as well as extrusion blow molding and injection blow molding alternatives in HDPE and PP.  In addition, there is very little overlap between the two companies' current customers, enabling the company to now deliver a broader range of products and services to an already existing customer base."

Mr. Abd added "While we are in the midst of a very difficult economic period, we believe that the combination of these businesses will allow us to offer our customers, and the market in general, an unparalleled breadth of product offerings and innovative packaging designs with a strong and shared cultural focus on Quality, Service and Value.  We are also thrilled to be aligned with Castle Harlan, which has a long history of partnering with management teams to realize shareholder value through superior customer service."

Formally, the parent company of Novapak, PVC Container Corporation (Pink Sheets: PVCO), has entered into a definitive merger agreement, providing for the acquisition of such parent company by an affiliate of Pretium.  The parent company of Novapak is owned by Kirtland Capital Partners, a Cleveland-based buy-out firm, and other outside investors.  The transaction is expected to return approximately $8,094 per share in cash to holders of common stock in the parent company of Novapak.  The transactions are subject to the satisfaction of various conditions and are scheduled to close in the first quarter of 2010.

Pretium Packaging was founded in 1992 to provide highly technical, blow molding supply solutions to customers with small to medium volume requirements.  The company, headquartered in Chesterfield, MO, completed 11 acquisitions in the 1990's and currently operates 9, ISO 9001:2000 rated manufacturing facilities in North America.  Pretium produces blow molded plastic containers utilizing all major resin types with a primary focus on PET and HDPE and all processing technologies; single stage and two stage ISBM, IBM and EBM.  While Pretium serves customers in most markets, more than 70% of the company's sales are focused in the food, pharmaceutical and personal care markets.  Pretium focuses on providing customers with leading edge unique design solutions with a dedicated focus on Quality, Service and Value.

Novapak is a major producer of PET, PP, HDPE and in-line fluorinated HDPE containers for specialty chemical, personal care, healthcare, food, beverage, household and automotive applications. The company is headquartered in Eatontown, NJ, and operates five ISO 9001:2000 certified plants in New York, Pennsylvania, Illinois and South Carolina.  The business specializes in small to medium volumes of medium to large size plastic bottles (8 oz & up) requiring rapid commercialization, customized designs and high package performance.

Castle Harlan, founded in 1987, invests in controlling interests in the buyout and development of middle-market companies in North America and Europe. Its team of 19 investment professionals has completed 50 acquisitions since its inception with a total value in excess of $9 billion.  Castle Harlan currently manages investment funds with equity commitments of $2.5 billion.  The firm traces its roots to the start of the institutionalized private-equity business in the late 1960s.  Castle Harlan's current portfolio companies, which employ more than 42,000 people, include Ames True Temper, a leading manufacturer of lawn and garden tools and accessories; Baker & Taylor, the largest global distributor of books and entertainment products to libraries and retailers, and Associated Packaging Technologies, Inc., a leader in specialty packaging for the frozen food industry.

Kirtland Capital Partners is a relationship-oriented private equity firm focused on accelerating the growth of middle-market companies by leveraging its internal operating, financial and strategic resources. For more than 30 years, Kirtland has executed a disciplined investment strategy that has created long-term value in its portfolio companies and delivered superior returns to its investors and management teams. Kirtland invests in niche manufacturing, distribution and business service companies with potential for growth organically and/or through strategic acquisition. The firm has $290 million of capital under management from institutional and individual investors. Kirtland is known for the strong partnerships it builds with its operating management teams and the experience of its professionals.

Lazard Middle Market LLC (www.lazardmm.com), a subsidiary of Lazard Ltd (NYSE: LAZ), provides strategic advice on M&A, restructuring, and public and private capital raising to the middle market. The firm's professionals focus exclusively on mid-cap companies, bringing to bear all the industry expertise, senior board-level relationships and local perspectives of Lazard's bankers in 39 cities across 24 countries in North America, Europe, Asia, Australia, Central and South America.

Brown Gibbons Lang & Company is a leading independent investment bank serving middle market companies and their owners throughout the U.S. and internationally. BGL's professionals are experts in mergers & acquisitions, debt & equity placements, financial restructurings and valuations & financial opinions. BGL is the U.S. partner in Global M&A, the world's leading partnership of independent middle market financial advisory firms focusing on cross-border transactions. For more information, visit www.bglco.com.

SOURCE Pretium Packaging LLC