AptarGroup To Acquire Fusion Packaging, Grow In Beauty Markets
Zacks Investment Research | Feb 18, 2020 09:28PM ET
AptarGroup, Inc. (NYSE:ATR) has entered into an agreement to acquire Fusion Packaging. The buyout is expected to be accretive to AptarGroup’s Beauty + Home segment margins.
Founded in 2004, Fusion Packaging is a leader in high quality, prestige airless and color cosmetics packaging, and conception-to-launch turnkey solutions for the North American beauty market. It employs around 100 people across its headquarters in Dallas, sales and design offices in New York and Los Angeles, and operations in New Jersey and China. Fusion Packaging generated sales of approximately $80 million in 2019.
This is in sync with AptarGroup’s strategy to cater to market demands for fast beauty solutions with differentiated design and decorative offerings. The company is strengthening portfolio by expanding agile design and full-service beauty packaging capabilities. The company will also be able to leverage Fusion Packaging’s existing relationships with many global cosmetic and skin care customers and several rapidly growing indie brands.
Fusion Packaging has been growing at double-digit rates over the past few years. The color cosmetics and skin care markets has immense prospects. The buyout will enable AptarGroup to capitalize on these market prospects,. Further, Fusion Packaging’s capability in turnkey solutions is especially valuable to indie brands as well as large established customers requiring expeditious launches. Fusion Packaging will complement AptarGroup’s North American business. In the future, the company can use this model in Europe and other regions.
AptarGroup’s Beauty + Home segment generated around 52% of its total sales in fiscal 2018. It consists of operations that sell dispensing systems primarily to the beauty, personal care and home care markets. Sales to the beauty, the personal care and the home care market accounted for approximately 49%, 44% and 7%, respectively, of the segment’s total net sales in 2018.
The company remains on track with its business transformation, which primarily focuses on the Beauty + Home segment. The company expects the business-transformation plan to yield incremental EBITDA of approximately $80 million by the end of 2020, particularly within the Beauty + Home segment.
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AptarGroup’s shares have gained 13.5% in a year’s time against the Original post
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