Huhtamaeki Oy, a listed Finnish multi-branch firm, has agreed to acquire most of the operations of Sealright Co., Inc., a publicly listed US company and the leading North American manufacturer of packaging systems for frozen desserts. Huhtamaeki reorganised its North-American confection sector as late as in 1996 by selling its entire North-American confection business to the US-based Hershey Foods Corporation. Thus the acquisition of Sealright's rigid packaging business constitutes a new beginning for Huhtamaeki in the North American markets.
The portion of Sealright that Huhtamaeki will acquire had net sales of approximately 160 million US dollars, a turnover of around 880 million US dollars and employed 1 000 people in 1997. Huhtamaeki has agreed to a price of 11 US dollars for each Sealright share. Hence, Huhtamaeki will pay 122 million US dollars in cash for 100% of Sealright's shares and additionally assume the company's outstanding debt, approximately 80 million US dollars. The acquisition will still be subject to approval by a majority of Sealright's shareholders. Sealright's principal shareholder, George K. Baum & Co. of Kansas City, MO, has already agreed to vote in favour of the transaction.
The acquisition of Sealright will especially strengthen Huhtamaeki's development of its food packaging operations. Huhtamaeki's Polarcup division is already the industry leader in several segments of rigid food containers in Europe and Asia-Pacific. The Polarcup division expanded by 27 per cent in 1997 following a string of acquisitions in Europe and Asia. Sealright, on the other hand, has been the leading US manufacturer of frozen dessert packaging for decades. "Sealright will immediately place us into a world leadership position in premium ice cream containers," says Huhtamaeki's CEO, Mr Timo Peltola.
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