LAKE FOREST, Ill.--(BUSINESS WIRE)--Pactiv Corporation (NYSE: PTV) today announced it has completed its purchase of the stock of Prairie Packaging, Inc., a leading manufacturer of disposable tableware products. Prairie’s 2007 sales are expected to be approximately $500 million.
The purchase price of the acquisition is $1 billion, which represents approximately 7.0 times Prairie’s projected 2007 EBITDA of $116 million, plus tax benefits related to the treatment of the transaction as an asset acquisition for tax purposes. The transaction is expected to generate a return well in excess of Pactiv’s cost of capital. The transaction will be financed with a combination of pre-payable debt and public debt.
Prairie manufactures a broad range of tableware and foodservice products, including drink cups, portion cups, containers, cutlery, plates, and bowls. The company operates five manufacturing facilities in the United States and employs approximately 1,200 people.
“We are very pleased to have completed the purchase of Prairie Packaging in a timely manner. We anticipate a continuation of Prairie’s solid track record of strong sales growth, high margins, and significant cash flow generation,” said Richard L. Wambold, chairman and chief executive officer of Pactiv Corporation. “The acquisition of Prairie is consistent with our strategy and is an excellent fit with both of our Foodservice and Consumer segments, our customer base, and Pactiv’s “one-face-to-the-customer” operating model,” Wambold concluded.
This press release includes certain “forward-looking statements” such as “Prairie’s 2007 sales are expected to be approximately $500 million”; “the transaction is expected to generate a return well in excess of Pactiv’s cost of capital”; and “we anticipate a continuation of Prairie’s solid track record…cash flow generation”. A variety of factors may cause actual results to differ materially from these expectations including a slowdown in economic growth, changes in the competitive market, increased cost of raw materials, and changes in the regulatory environment. More detailed information about these and other factors is contained in the Company’s Annual Report on Form 10-K at page 54 filed with the Securities and Exchange Commission as revised and updated by Forms 10-Q and 8-K as filed with the Commission.
Pactiv Corporation (NYSE: PTV) is a leader in the consumer and foodservice/food packaging markets it serves. With 2006 sales of $2.9 billion, Pactiv derives more than 80 percent of its sales from market sectors in which it holds the No. 1 or No. 2 market-share position. Pactiv’s Hefty® brand products include waste bags, slider storage bags, disposable tableware, and disposable cookware. Pactiv’s foodservice/food packaging offering is one of the broadest in the industry, including both custom and stock products in a variety of materials. For more information, visit www.pactiv.com.