Oil prices edged up on Tuesday, following a 5 percent drop in the previous session, as high global production and a weakening economic outlook in Asia prompted analysts to warn of further falls. Oil output by the Organization of the Petroleum Exporting Countries (OPEC) reached the highest monthly level in recent history in July, and production could rise further if Iran achieves a plan to raise output by 500,000 barrels per day (bpd) as soon as sanctions are lifted. With U.S. production also near records and China's economy showing further signs of slowing, prices on Monday were pulled down close to the six-year lows touched at the start of 2015 and Brent fell below $50 per barrel for the first time since January. It has spent over 90 percent of the past decade above the $50 mark. Although prices rose on Tuesday, with Brent 35 cents higher at $49.87 a barrel by 0647 GMT and U.S. crude up 47 cents at $45.64 a barrel, analysts said more falls were expected.
Neenah Paper, Inc. announced today that it had completed the previously announced purchase of all of the outstanding equity of ASP FiberMark, LLC ("FiberMark") from an affiliate of American Securities LLC on August 1, 2015. FiberMark, with annual sales of over $160 million, is a specialty coating and finishing company with a strong presence in luxury packaging and overlapping technical product categories.The acquisition is expected to deliver synergies of $6 million per year within three years, with ongoing accretion (excluding one-time costs) of over $0.40 per share. The Company indicated it expects one-time costs in 2015 of approximately $5 million for transaction fees and integration. The purchase price of $120 million, subject to adjustments for acquired cash and a working capital true up, resulted in a cash payment of $123 million at closing, and was financed through $80 million of cash on hand and the balance from available borrowing capacity on the Company's revolving credit facility. Additional details about the acquisition will be discussed in the Company's second quarter earnings call on August 6th.
Grainger (NYSE: GWW), North America's leading broad line distributor of maintenance, repair and operating (MRO) products serving businesses and institutions, today announced it has entered into a definitive agreement to acquire Cromwell Group (Holdings) Limited, together with its subsidiaries ("Cromwell") on a cash free, debt free basis for £310 million GBP, (approximately $482 million USD) in cash. The transaction should be completed in early September. The acquisition of Cromwell is expected to be immediately accretive in 2015 and $0.10 to $0.15 accretive to Grainger's 2016 earnings per share. Founded in 1970 and headquartered in Leicester, England, Cromwell is the largest independent MRO distributor in the United Kingdom, serving more than 35,000 industrial and manufacturing customers worldwide with more than 80,000 industrial products and employing more than 2,150 team members. Sales for the fiscal year ending August 31, 2015, are forecasted to be £283 million GBP ($440 million USD) with the vast majority coming from the U.K.; EBITDA margins are expected to be approximately 10 percent.
Hachette Book Group parent company Lagardère Publishing reported Friday that HBG revenues for the first half of 2015, down 7.8% from 2014. HBG CEO Michael Pietsch blamed the drop on “a tough comparison” to strong early 2014 sales and—in a reference to its new sales agreement with Amazon—pointed to a slowdown in e-book sales “due to e-tailers no longer discounting many e-books at a loss.” In the first half of 2015, U.S. e-books represented 24% of net trade sales, down from 29% at the end of June 2014. The drop was due to a lighter schedule of titles and, Lagardère said, “the implementation of the agreement with Amazon.” In 2014 HBG revenues declined 4.8% from 2013, reflecting Hachette’s battle with Amazon over terms, strong sales in 2013 and a decline (19%) in e-book sales in the 4th quarter of 2014.
UPS reported second-quarter earnings that were ahead of analyst estimates, even though revenue was slightly below expectations, the latter hurt by the strong dollar and the continuing decline in fuel surcharges due to lower oil prices. Yields were helped on the pricing side by the annual general rate increase, new dimensional weight charges and other surcharges. The company’s Q2 revenue was $14.1 billion, down 1.2% percent from 2014. The adjusted earnings per share figure was $1.35, well ahead of the analyst consensus of $1.26 per share; it was up 175% from 49 cents in the year-ago quarter. Revenue for UPS’s domestic package business was $8.81 billion, up 1.6% from $8.67 billion in 2014.
Goss International today announced that its parent company, Shanghai Electric Corporation (SEC), has entered into a definitive agreement to sell Goss International and its subsidiaries to American Industrial Partners (AIP). The agreement forms part of a broader strategy to further strengthen Goss’ position as the world’s leading web-offset printing press supplier. With its broad portfolio of investments, including past and current holdings in printing machinery manufacturers, AIP proved to be the clear choice for ownership of Goss, upholding the company’s current standards as a customer-focused, technology-driven market leader. The AIP transaction is subject to successfully achieving appropriate regulatory approvals and meeting certain closing conditions. It is expected to close within the next 60 to 90 days.
Berry Plastics Group, Inc. (NYSE:BERY) today reported results for its third fiscal 2015 quarter, referred to in the following as the June 2015 quarter: Increased cash flow from operations by 50 percent to $180 million in the June 2015 quarter compared to $120 million in the same prior year quarter Recorded net loss per diluted share of $0.11 and adjusted net income per diluted share of $0.51 for the June 2015 quarter Increased operating EBITDA to $219 million (17.6 percent margin) for the June 2015 quarter compared to $212 million (16.3 percent margin) in the same prior year quarter Improved adjusted free cash flow by $74 million to $140 million for the June 2015 quarter compared to $66 million in the same prior year quarter Generated adjusted free cash flow of $378 million and adjusted EBITDA of $830 million for the four quarters ended June 2015 Raised fiscal 2015 adjusted free cash flow guidance to $400 million
Spinnaker Coating, a manufacturer of pressure sensitive paper and film products for the printing industry, has added three vinyl constructions to its line that are designed for printing in production and desktop laser printers. “The addition of these vinyl products strengthens our overall digital portfolio, which has been increasing steadily this year with water-based ink jet products, as well as other existing Spinnaker constructions that are now approved by OEMs on their digital equipment,” says Julie Billing, Roll Product manager. 3.5 mil TC White Laser Vinyl (#45853) is paired with PRM-550, an aggressive emulsion acrylic adhesive appropriate for indoor and outdoor labeling. Laser Vinyl Drum Label (#45115) is stocked with PDL-09, a cold temperature emulsion acrylic adhesive with properties designed for drum labels. This construction has received BS5609 Part 2 approval. Both items are used for bumper stickers, point-of-sale displays, window graphics, indoor and outdoor signage, chemical labels, drum labels, placards, parking pass decals, and product ID labels.
Berry Plastics Group, Inc. (“Berry Plastics”) (NYSE:BERY) and AVINTIV Inc. announced today that they have entered into a definitive agreement for Berry Plastics to acquire AVINTIV Inc. (“AVINTIV”) from private equity funds managed by The Blackstone Group LP for approximately $2.45 billion in cash on a debt-free, cash-free basis. AVINTIV Inc. is one of the world’s leading developers, producers, and marketers of specialty materials used in infection prevention, personal care, and high-performance solutions. With 23 locations in 14 countries, an employee base of over 4,500 people, and the broadest range of process technologies in the industry, AVINTIV’s strategically located manufacturing facilities position it as a global supplier to many of the same leading consumer and industrial product manufacturers that Berry Plastics supplies. For the twelve-month period ended March 2015, AVINTIV generated pro forma revenues and adjusted EBITDA of $2.1 billion and $303 million, respectively. Additionally, Berry Plastics expects to realize approximately $50 million in annual cost synergies.
About two years ago the firm installed a Macsa laser coder from I.D. Technology, a ProMach company, for glass bottles filled in its distillery operation. And then early this summer a second Macsa coder arrived for a beer bottling line (shown here). In both cases, says Gary Olson, President of Brewery Operations, it was the permanence and legibility of the laser code that drove the upgrade. “Once that code is on, it’s on,” says Olson. He also likes that with laser coding there’s no more inks to buy or cleaner solvent, either. Installed elsewhere at the plant, though not as recently as the laser coders, was a FoxJet High-Resolution Ink-Jet Printer, also from I.D. Technology, for one-color printing on corrugated cases of beer. What makes this printer so invaluable is that it allowed Minhas to greatly reduce the variety of preprinted corrugated shippers it buys. Why? Because not only can the beer variety and other variable information be printed on the case, but also graphics and logos. This capability, says Olson, saves Minhas about $750,000 annually in corrugated material costs because now the firm can buy more or less generic, unprinted cases and print them on line. It also frees up a lot of warehouse space. “We do a wide variety of container sizes and we do a fair bit of contract or private label bottling,” says Olson. “That means a lot of changeover, so being able to print cases right on line makes a big difference.”