NEENAH, Wisconsin (From news reports) -- The pressure on Bemis Co. to sell itself is growing both internally and externally, it was reported this week.
Bemis, the largest US maker of flexible plastic food packaging -- like bottles for Pepsi and tubes for Colgate -- has hired Goldman Sachs to explore its options, two sources close to the situation said.
The 159-year-old Neenah, Wisc., manufacturer, whose profits and revenues have slipped in recent years, is likely to draw plenty of interest from rivals should it decide to put itself on the bloc, sources said.
In fact, British-based DS Smith, a maker of corrugated packaging, is working with Citigroup and is interested in pursuing the $4.2 billion market cap Bemis, a source close to the situation said.
There were reports in September that Zurich-based Amcor Ltd., the world's largest maker of flexible plastic packaging, was working on an offer for Bemis as it looks to expand it US operations.
Amcor is working with investment bank UBS, a source said.
Bemis this summer told shareholders it would need to sell itself in 12 months if it could not execute a turnaround, an industry source said.
Now, six months later, the turnaround has not happened and it will be hard for the company to reject offers, the source said.
"Results from the ongoing turnaround effort have been checkered at best," BMO Capital Markets said in a Nov. 15 report. "During 2017, they cut guidance three quarters in a row and reduced long-term growth targets."
Part of the problem for Bemis is that it's focused on the biggest food companies, and many of them have been losing market share. Rising resin prices are also not helpful.
Meanwhile, shareholder activist Starboard Value disclosed last month it had become a top-10 Bemis holder.
"Starboard held large stakes in two chronic underperformers in our [packaging] sector, Wausau Paper and MeadWestvaco," BMO said. "In both cases, the endgame was a sale of the company."
In the nine months ended Sept. 30, Bemis reported profits fell 23.3 percent from the previous year on flattish revenue. Since 2014, Bemis' profits from continuing operations has been flat while revenue has dipped 8 percent over that period.
Bemis shares are up less than 1 percent over the last two years. They closed Monday at $46.67, up 17 cents.
BMO forecast that Amcor, if it bought Bemis, could pay $60 a share.
Bemis, DS Smith and Amcor did not return calls.
Goldman and Citigroup declined to comment.
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