Berry To Acquire Avintiv For $2.45 Bln. From Blackstone

(RTTNews) - Plastic packaging products maker Berry Plastics Group Inc (BERY), on Friday agreed to buy specialty materials company Avintiv from Blackstone Group LP (BX) for about $2.45 billion in cash on a debt-free, cash-free basis.

Berry expects the deal to catapult it to a leading plastics packaging and engineered specialty materials company, and enable it tap the growing market for hygiene and healthcare products.

Evansville, Indiana-based Berry expects the deal to be to be accretive to free cash flow and earnings. The deal is expected to close by the end of calendar year 2015.

Avintiv has 23 locations in 14 countries and an employee base of over 4,500 people. The company makes materials used in a range of products, including diapers, surgical gowns and feminine hygiene products. For the twelve-month period ended March 2015, Avintiv generated pro forma revenues of $2.1 billion.

Berry expects to realize about $50 million in annual cost synergies from the deal.

Avintiv was bought by Blackstone Group in 2010 for $326.2 million from private equity firm MatlinPatterson in 2010. The company was earlier known as PGI, which filed for an initial public offering in February.

Also Friday, Berry reported a loss for the third quarter, hurt by lower sales and debt-extinguishment costs. Excluding items, its adjusted earnings missed Wall Street estimates and sales too fell short of expectations.

Berry reported third-quarter net loss of $13 million or $0.11 per share compared with a profit of $15 million or $0.12 per share last year.

Excluding items, adjusted earnings for the quarter were $0.51 per share.

Revenues for the quarter fell 4 percent to $1.24 billion from $1.30 billion in the prior year.

Analysts polled by Thomson Reuters estimated earnings of $0.52 per share on revenues of $1.32 billion for the quarter. Analysts' estimates typically exclude special items.

Looking ahead, Berry expects fourth- quarter sales volumes to be consistent with the past several quarters.

BERY is trading at $33.96, up $0.60 or 1.78%, on a volume of 6.3 million shares on the NYSE.