Berry Plastics Acquires Rival AEP, as Packaging M&A Holds Strong

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Berry Plastics Group Inc. (NYSE: BERY) has agreed to acquire AEP Industries Inc. (Nasdaq: AEPI)for $765 million in cash and stock. The target’s shareholders will be paid in half stock and half cash.

AEP, based in Montvale, New Jersey makes flexible plastic films that are used to package consumer, industrial and agricultural products out of its 14 North American manufacturing facilities. The company has $1.1 billion in annual sales and $103 million in annual Ebitda.

“We believe Berry is the right partner to expand our product portfolio to deliver high quality packaging films to even more customers around the world,” says AEP CEO Brendan Barba.

Berry Plastics says the two companies will be in a better position to compete in the North American plastics market since they both complement each other from a products standpoint. The company serves the household and personal care, food and beverage and health care sectors. In 2015, Evansville, Indiana-based Berry plastics purchased Avintiv from Blackstone Group LP (NYSE: BX).

Packaging deals have been driven by companies looking to expand into new markets. Novolex, backed by Wind Point Partners, purchased Heritage Bag Company; Packaging Corp. of America (NYSE: PKG) said it will purchase TimBar Corp.; Platinum Equity has agreed to acquire the foam plastics and flow control devices divisions from Broadway Industrial Group.

Citigroup Inc. (NYSE: C) and Bryan Cave are advising Berry Plastics. Bank of America Merrill Lynch, Skadden Arps Meagher & Flom along with Honigman Miller Schwartz and Cohn are advising AEP.

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