Silgan Holdings Inc. is acquiring injection moulder Gateway Plastics Inc. in a nearly half a billion dollar deal that adds a manufacturing facility near Milwaukee.
Silgan pays $ 485 million for Gateway and its 350,000-square-foot facility in Mequon, Wisconsin. Gateway is expected to have approximately $ 150 million in revenue this year and adjusted earnings before interest, taxes, depreciation and amortization of $ 46 million.
“This acquisition further expands our comprehensive product range in the area of dispensing and special closures and offers further growth opportunities for many of our existing and mutual customers.” Adam Greenlee, CEO of Silgan, said in a statement. “We believe that Gateway’s advanced automation platform can be used for much of Silgan’s manufacturing presence.”
Gateway began operations in 1970 and will be “slightly profitable” this year, with more expected next year, said Silgan of Stamford, Connecticut.
Silgan said the deal will include some $ 90 million in tax breaks and the new owner expects to save about $ 2 million through greater purchasing power within the next year.
Silgan is borrowing through its senior secured credit facility to fund the acquisition.
“Gateway has the capacity to grow as it is very well capitalized with state-of-the-art equipment and market-leading capabilities,” said Greenlee.
Gateway’s strengths include in-house packaging design, toolmaking, mold making and secondary activities such as assembly, warehousing and sales. Key markets are food packaging, pet care, chemicals and nutraceuticals.