Kelso & Co. agreed to acquire publicly-held BWAY Corp., a manufacturer of steel containers, in a public-to-private deal valued at $330 million. Kelso will pay a total of $174 million in cash, or $20 a share for each of BWAY’s 8.7 million shares, and will also assume $156 million in BWAY debt. The transaction is expected to close in the first quarter of 2003.
BWAY Corp. manufactures steel containers for the general line segment of the North American metal container industry, which includes paint cans, food containers, sealant cans and steel ammunition boxes. Additionally, BWAY supplies material center services, providing customers with a variety of coating or lithography functions.
Kelso will keep the current management of BWAY in place, with Jean-Pierre Ergas maintaining his role as chairman and chief executive of the company and Warren Hayford continuing as BWAY’s vice chairman and director. Upon the closing of the deal, Ergas has agreed to reinvest roughly 50% of his current equity holdings back into the company, while Hayford will offer 35% of his holdings.
Kelso closed its most recent fund, Kelso Investment Associates VI L.P., in 1998 with $1.5 billion. Among the portfolio companies in the fund are Hilite Industries, a manufacturer of engineered components for the automobile sector; CDT Ltd., a developer of light emitting polymers for consumer electronic products; and Citation Corp., which produces cast, forged and machined components for the industrial and durable goods industries. Most recently, Kelso acquired Nortek in a $1.6 billion management buyout. Nortek, which was a publicly traded company, designs, manufactures and markets building products.