Bemis Company, Inc. BMS has acquired the rigid plastic packaging operations of Emplal Participações S.A. (Emplal). The acquisition is in sync with Bemis’ growth policy to expand in markets that are optimally suited to its strengths and capabilities. Financial terms of the transaction were, however, not disclosed.
Emplal, a privately-owned Brazilian manufacturer of plastic packaging for food and consumer applications, had recorded annual net sales of approximately $58 million in 2014. In Jul 2015, Bemis signed a definitive agreement to acquire the South American rigid plastic packaging operations of Emplal.
Bemis expects the integration of the two companies’ expertise to match its manufacturing competence in Brazil in 2016 and beyond. While the transaction will not impact full-year 2015 earnings per share guidance at Bemis, it is expected to be modestly accretive to earnings in 2016.
Bemis has frequently adopted the inorganic path to growth and continues to pursue new acquisitions for meaningful opportunities to grow its business and improve future performance. Bemis expects suitable acquisitions to improve its competitiveness and future financials.
Bemis’ continued focus on generating strong cash flow allows it to invest in capital projects, fund strategic acquisitions and undertake share repurchases. The company raised its full-year 2015 outlook for cash flow from operations to $500 million and retained its capital expenditure expectation in the range of $200 million to $215 million, to support productivity and efficiency projects as well as growth projects driven by increased customer demand for value-added products.
Moreover, Bemis is poised to benefit from its strategic initiatives, operational efficiencies and cost controls. Further, share repurchases should also drive its financial performance.
Neenah, WI-based Bemis Company is a global manufacturer of flexible packaging products and pressure sensitive materials sold primarily to the food industry. The company also sells its products to other customers in the chemical, agri-business, medical, pharmaceutical, personal care, electronics, automotive, construction and graphic industries.
Currently, Bemis has a Zacks Rank #3 (Hold). Some better-ranked stocks in the industrial products sector are Berry Plastics Group, Inc. BERY, Brady Corp. BRC and Codexis, Inc. CDXS. All these stocks carry a Zacks Rank #1 (Strong Buy).
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