Nortech provides services to automated packaging machines under the Nortech Packaging and Tishma Technologies brands
IPG seeks to expand business with the purchase of Nortech Packaging. (Credit: Adam Radosavljevic from Pixabay)
Paper and plastic products manufacturer Intertape Polymer (IPG) has agreed to acquire the operating assets of Nortech Packaging, a provider of after-market servicing for packaging machines.
The agreement is valued at approximately $36.5m, subject to certain post-closing adjustments and potential earn-out consideration.
Based in Chicago, Illinois, Nortech is engaged in manufacturing, assembling and servicing automated packaging machines under the Nortech Packaging and Tishma Technologies brands.
It provides services to customers in industries including food, pharmaceutical, e-commerce, confections, personal care and cosmetics, and beverages.
IPG president and CEO Greg Yull said: “Packaging automation and system design are playing an increasingly important role in our customer’s competitive positioning, especially in the e-commerce market.
“We believe this acquisition will provide us with the opportunity to move upstream in our target customer’s production process with an expanded product bundle and a continuous supply of consumables.
“This acquisition delivers on both fronts. We remain committed to paying down debt moving forward as our cash flows improve with contributions from our recent CapEx investments and our earlier acquisitions.
“At the same time, we will continue to be disciplined in our approach to acquisitions that strengthen our product bundle or offer strategic benefit to IPG, meeting our customer’s needs.”
The deal will enable IPG to meet the increasing demand in packaging automation
The acquisition forms part of IPG’s plan to improve its products to meet the growing demand for packaging automation.
IPG said that the deal will also add engineering automation and integrated robotic design talent to its existing engineering and design teams.
Scheduled for completion in the first quarter of 2020, the agreement is subject to customary closing conditions and approvals.
In 2019, IPG commissioned second water-activated tapes line at its facility in the US for the production of commercial tapes.
Intertape Polymer Group manufactures a variety of paper- and film-based pressure-sensitive and water-activated tapes, polyethylene and specialised polyolefin films, protective packaging, woven coated fabrics and complementary packaging systems.