Packaging solutions provider Ball has collaborated with private equity investment firm Platinum Equity to create new packaging company, Ball Metalpack.
The companies have signed joint venture (JV) and definitive purchase agreements to establish Ball Metalpack, which will engage in the production of steel containers for aerosol products, food, household consumables, pet food, nutritional and other products in the US.
Platinum Equity will hold 51% stake in the new packaging firm. As per terms of the deal, Ball will secure over $600m from the transaction and own the remaining 49% interest in Ball Metalpack, for a total value of around $675.
Ball chairman, president and CEO John Hayes said: “This agreement enhances our ability to immediately return additional value to shareholders via share repurchases, reduce Ball’s leverage and grow EVA dollars.
“More than half of the proceeds from today’s announcement will be used to repurchase stock, increasing the 2018 share buyback to be in the range of $675 million by year end.”
Ball will add its US steel food and aerosol packaging manufacturing assets to the new JV firm.
The deal covers the tinplate steel assets located in Canton, Columbus of Ohio, Oakdale of California, Springdale of Arkansas, Horsham of Pennsylvania, as well as Milwaukee and Deforest of Wisconsin.
Jim Peterson, who is currently managing the assets, will serve as CEO of the joint venture.
Ball will continue to own and manage its aluminum aerosol packaging facilities in the US, Canada, Europe, India and Mexico and its steel aerosol facilities in Argentina.
The company will also continue to operate its metal packaging facility in Findlay of Ohio,, which mostly produces aluminum beverage containers.
As part of a long-term supply contract, the Findlay will continue to manufacture two-piece steel food cans for Ball Metalpack.
Platinum Equity partner Louis Samson said: “We are excited to partner with Ball Corporation and the Ball Metalpack management team headed up by Jim Peterson, and are confident that together we’ll deliver for customers and shareholders alike.”