Rexam expands in plastic packaging

Agrees to acquire US-based Delta Plastics Inc for a total cash consideration of $154m.

07/09/05 Rexam, the global consumer packaging group and the world's leading beverage can maker, is pleased to announce that it has agreed to acquire US-based Delta Plastics Inc for a total cash consideration of $154m (£83m), including repayments of borrowings and redemption of preference shares. The majority shareholder is Stonebridge Partners, a private equity fund.

The acquisition, which is subject to US competition authority approval, is expected to be earnings enhancing from the outset and to cover Rexam's cost of capital in 2007.

Delta Plastics is based in Hot Springs, Arkansas. It designs and manufactures plastic injection-moulded jars and closures for a variety of applications, primarily for the personal care and food markets. The company holds a number of patented product designs.

The operation, which employs more than 350 people, comprises two modern injection-moulding facilities in Hot Springs. It also has a technology centre, located near Los Angeles, California, which designs, develops and manufactures Delta Plastics' own moulds and automation equipment.

A combination of technology leadership, quality products and excellent customer service has enabled Delta Plastics to grow at a rate well above the market during the past five years. In 2004 it reported sales of $50m and, as at 31 December, net operating assets of $49m.

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