Danish food packaging company Faerch has announced that it is acquiring MCP Performance Plastic from Kibbutz Hama'apil in Emek Hefer, which manufactures trays for the food industry. The acquisition is based on a company valuation for MCP of €57 million at the end of 2020.
However, "Globes" understands that MCP's owners Plazit Industries of Kibbutz Gazit (50.1%) and Kibbutz Hama'apil (49.9%) will receive less than this amount because the company has debts amounting to NIS 50 million, so that after the debt is deducted each kibbutz will receive NIS 85 million, before tax.
MCP, which was founded more than 40 years ago, has more than 200 employees at its two factories in Israel and the US. The company has revenue of several tens of millions of dollars annually. MCP uses advanced innovative technology to develop and manufacture food packaging that can be taken straight from the freezer and put in a microwave or oven. Customers include food manufacturers, food marketing companies and retail chains in the US, Europe and Middle East.
75% of production in Israel is for export and the factory that was opened in the US in 2017 has increased MCP's revenue by 30%.
Faerch Group, a leading supplier of sustainable, thermoformed food packaging with integrated recycling capabilities in Europe, has made the acquisition, it says, to enter the US market. Faerch added that the acquisition is part of its, "long-term growth strategy and underpins the ambition to lead the transition of food packaging towards true circularity globally."
Under the terms of the deal, MCP will continue to operate from Kibbutz Hama'apil for at least the next five years, until the end of the agreement in 2026. During that time Faerch will formulate a plan regarding the kibbutz factory. There will be no effect on MCP's employees for the time being.
Faerch CEO Lars Gade Hansen said, "MCP will serve as a stepping stone for Faerch entering the important US market, which is estimated to account for $55 billion. Being local will allow us to support the retailers, brand owners and food manufactures in making the right material choice for true circularity in the US food packaging market.
Published by Globes, Israel business news - en.globes.co.il - on August 23, 2021
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