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CM Packaging’s Sale of a Division to American Pan

Transaction Details

Client: CM Packaging Group is a leading manufacturer of recyclable aluminum foil containers and plastic packaging/plastic food containers for the bakery and the food service industries, with a struggling commercial bakeware division
Ownership: The Division was a wholly-owned S-Corp subsidiary of CM Packaging
Buyer: A Buyer’s group led by American Pan Co., a Bundy Company, the world’s leading manufacturer of custom baking pans
Transaction: The Group acquired 100% of the assets of the Commercial Bakeware Division
Consideration: 100% cash

Situation Review

  • KGI was engaged by CM Packaging to conduct a very targeted sale process for a division that was outside its current strategic direction.
  • The Division was under-performing and generated pre-tax income of only $1.4 million in the year prior to sale.

Transaction Process

  • Using its knowledge of potential threats from Asia to the Industry’s profit base, KGI rapidly identified buyers most likely to gain from capture of a competitor’s revenue.
  • A compelling sale document was prepared and presented to a handful of the Industry’s top players.

Outcome

  • Intense negotiations resulted in an extraordinary outcome for the Client.
  • The Division’s products are now sold under the Bundy American Pan umbrella as the “Chicago Metallic” brand.
  • Client subsequently engaged KGI for an acquisition initiative that resulted in multiple successful transactions.