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Ball Corporation to sell U.S. steel food and steel aerosol assets

Staff Writer |
Ball Corporation and Platinum Equity announced that they have entered into joint venture and definitive purchase agreements to form Ball Metalpack, a new packaging company that manufactures steel containers for aerosol products, food, household consumables, pet food, nutritional and other products in the United States.

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Platinum Equity will own 51 percent of Ball Metalpack and Ball Corporation will own 49 percent.

Ball Corporation will contribute its U.S. steel food and aerosol packaging manufacturing assets to the joint venture.

These include the following tinplate steel assets: Canton (Brookline and Warner Rd.) and Columbus, Ohio; Milwaukeeand Deforest, Wisconsin; Chestnut Hill, Tennessee; Horsham, Pennsylvania; Springdale, Arkansas, and Oakdale, California.

In 2017, these U.S. tinplate steel assets had sales of $746 million and comparable operating earnings of $48 million. Jim Peterson, who currently manages those assets, will act as CEO of the joint venture.

In return, Ball Corporation will receive more than $600 million in pre-tax proceeds from the transaction and will retain a 49 percent interest in Ball Metalpack, for a total value of approximately $675 million.

Ball Corporation will continue to wholly own and operate its aluminum aerosol packaging facilities in the U.S., Canada, Europe, India and Mexico, and its steel aerosol facilities in Argentina, as well as the Findlay, Ohio, metal packaging facility, which largely produces aluminum beverage containers.

The Findlay, Ohio facility will continue to produce two-piece steel food cans for Ball Metalpack under a long-term supply contract.

Platinum Equity is a global private equity firm with $13 billion of assets under management and a highly specialized focus on business operations.

The firm has substantial packaging expertise, and more than 20 years' experience acquiring and operating businesses that have been part of large corporate entities.

Platinum Equity previously owned BWAY, a North American manufacturer of rigid metal and plastic containers.

During Platinum Equity's ownership, BWAY's EBITDA grew 45 percent through a combination of operational improvements and growth initiatives.

Ball expects the U.S. steel asset sale and joint venture transaction to close in July 2018 with approximately 1,300 employees transferring from Ball to the joint venture.

Post-close, Ball Metalpack's financial results will be reported in equity in results of affiliates within Ball's consolidated statements of earnings.

Ball's global aluminum aerosol and Argentine tinplate steel aerosol businesses will be led by Stan Platek, vice president and general manager, and its financial results will be reported in the Other non-reportable segment.

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