SOUTH HACKENSACK, N.J., Sept. 27, 2011 /PRNewswire/ -- AEP Industries Inc. (Nasdaq: AEPI, the "Company") today announced that it has reached a definitive agreement to acquire substantially all of the assets and specified liabilities of Webster Industries (" Webster"), a privately-held national manufacturer and distributor of retail and institutional private label food and trash bags, in a cash transaction valued at approximately $28.4 million, subject to a post-closing working capital adjustment. Webster has operations in Montgomery, Alabama and is an operating division of Chelsea Industries, Inc.
Founded in 1957, Webster sold 93 million pounds of product with recorded net sales of $145 million in 2010. Webster's product lines include high value-added food contact products, which consist of food storage and freezer bags with a resealable zipper, bags with a slider close, fold top and twist tie food storage and sandwich bags, and conventional trash bag products.
"This is an exciting opportunity for AEP, as it allows us to enter into a new market with significant cross-selling potential," said Brendan Barba, Chairman, President and Chief Executive Officer of the Company. "The private-label market continues to thrive, and with a stronger, more diversified portfolio of products, we will be able to build on our success in the plastics industry and create additional long-term value for our shareholders. We expect to achieve significant cost savings, realized principally from improved resin purchasing and other synergies throughout the combined organization."
Jack Shields, president of Webster Industries, said, "With virtually no overlap in our markets, this combination will provide a stronger platform from which we can enhance our product and service offering to customers. Webster and AEP share a successful history, and this transaction will strengthen both organizations. We look forward to our future as a part of AEP."Commenting on the transaction, Ronald Casty, Chairman of Chelsea Industries, observed, "This combination will make both companies stronger and better position them to prosper in the marketplace. I am pleased that our Webster employees will be working with such a fine organization." The transaction is expected to close in two to three weeks and is subject to specified closing conditions. The Company plans to finance the transaction through a combination of cash on hand and availability under its revolving credit facility.