Growth planned at Chesapeake as new owners promise cash boost

US-based private equity houses Irving Place Capital Management and Oaktree Capital Management finalised the $485m deal on 1 May, four months after Chesa-peake’s fall into chapter 11 bankruptcy protection at the end of December.

They immediately moved the headquarters of the firm from the US to Amersham in the UK and appointed Jerry Kerins as chairman and chief executive of the company.

In an exclusive interview with Packaging News, Irving Place senior managing director and partner Philip Carpenter described the company, which employs 5,400 staff at 42 sites across the world, as a global growth story.

He said: “First, we’ve transitioned the company, through recapitalisation and new private ownership. Chesapeake is now well capitalised and positioned for growth.”

Carpenter said that there were “several exciting growth prospects” open to Chesapeake and that the new ownership structure would give the management team “the financial flexibility to pursue those opportunities”.

This is the second packaging deal Irving Place has completed this year. Last month, the company bought Ivy Hill Corporation, which specialises in multimedia packaging.

“One of the reasons we like packaging is because of its increasing importance in today’s consumer products, particularly as an advertising medium,” said Carpenter.

He added that some of Chesapeake’s key markets – pharmaceuticals, liquor and confectionery – were “more defensive in challenging times”.

Kerins, whose 30 years’ experience in packaging has included founding PET container supplier Continental PET Technologies and building it to an international group with 26 factories in 10 countries, was also optimistic about the future for the group.

He said: “We can now move forward with our plans to expand the business with a strong capital structure and renewed enthusiasm.”

Kerins has previously worked with Oaktree as a member of the board and as an investor in German flexible packaging group Nordenia, in which Oaktree holds a stake. Oaktree also has a stake in US packaging group Tekni-Plex.

INDUSTRY REACTION
Observers have given a positive outlook on Chesapeake’s prospects following the completion of its buy-out by two US private equity houses.

BPIF Cartons president John Monks welcomed the decision to relocate the company HQ to the UK.
He said: The idea that you can make decisions on management strategy and local issues from a distance is nonsensical.

Lansdowne Capital packaging analyst Tim Rothwell said Chesapeake had always performed best as a private company.

It’s good to see it back as a UK entity. Let’s hope that a fresh start will mean a more successful business, he said.

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