IMA (Industria Macchine Automatiche SpA) is set to acquire more than 90 per cent of the shares in Packaging Systems Holding , which owns Nova Packaging Systems. Nova sells its bottling and counting machines under the Kalish, King, Lakso, Merrill and Swiftpack brands.
The Italian company is paying $14.6 million (€11.8m) for Nova, and said the deal was intended to provide customers with one-stop shopping for processing and packaging equipment needs, particularly for pharmaceutical applications.
Nova's manufacturing capabilities in North America and the UK would be strengthened by IMA's manufacturing plants in Italy, Germany, India, and China, company says. Importantly, IMA now gains a manufacturing base in the US, which accounts for more than 50 per cent of pharmaceuticals production worldwide and which demands ever closer ties with equipment suppliers.
The consolidated sales of the Nova are forecast to be around $35 million in 2004, with an EBITDA (earnings before interest, taxes and depreciation) in excess of 10 per cent of net revenues.
Alberto Vacchi, managing director of IMA, said that the acquisition allows IMA to expand its range of machines for the packaging of capsules and tablets to include bottling machines, complementing its existing blister line expertise.
Indeed, the absence of bottling capability was a major impediment to IMA's ambitions to expand into the US market, where the move towards unit-dose packaging has not been as rapid as in Europe. Most companies offer products using both blisters and bottles, so offering both in a 'one-stop-shop' makes good commercial sense, added Vacchi.
He also believes that sales of the counting machines manufactured by Nova Packaging will accelerate sales of other products in IMA's current range, such as capping, sealing, labelling, cartoning and end-of-line machines. These machines are generally part of bottle filling lines which, in the past, Nova had to acquire from third parties, or rely on existing infrastructure at the customer's facility.
Discussing IMA's growth strategy, Vacchi said candidly that IMA had been trying to develop its US objectives for many years, without much success, as it encountered an absence of suitable acquisition companies and baulked at the high costs and risks associated with a 'green field' start-up of production controlled from Italy.