Closure: Silgan acquires Portola for $266m

By Joseph James Whitworth

- Last updated on GMT

Related tags Europe Vice president United kingdom

Portola Packaging, a manufacturer of plastic closures, has been bought by Silgan
Portola Packaging, a manufacturer of plastic closures, has been bought by Silgan
Silgan Holdings has acquired Portola Packaging for $266m to broaden its European closures business.

Silgan said it expects the deal to be slightly beneficial to earnings at first, excluding the impact of the purchase and the write-up of inventory.

It will become more beneficial as synergies take hold over the next eighteen months following the closing.

The supplier of rigid packaging expects to fund the purchase price from a combination of cash on hand and borrowings under their senior secured credit facility.

Expand Europe base

Portola Packaging is a manufacturer of plastic closures with sales of $200m in 2012 and operates eight facilities in North America and Europe.

“Portola has a strong reputation as an innovator in closure design and operational leadership. As a result, we believe this acquisition will be highly synergistic with our existing closure business, while providing a broader platform to service our customers’ market needs.

“In addition, we are excited about the opportunity to expand our relatively small European plastic closure presence through Portola’s manufacturing facilities in the United Kingdom and Czech Republic,” ​said Bob Lewis, executive vice president and chief financial officer.

The transaction is expected to close in September, subject to certain customary conditions and regulatory approvals.

Closure investment

Earlier this year, Portola shut one site and expanded two others​ as part of a $12m investment in its closures business.

In its Q2 results Silgan reported that continued political instability​ in Venezuela, Turkey and Jordan led to lower operating income from the Closures segment because of delays in sourcing steel as a result of political instability and currency restrictions.

However, they added that while there had been no domestic steel supply in Venezuela the situation was starting to get better.

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