Atlas Exits Novipax, Keeps Trays Unit

Atlas Holdings has sold Novipax, a maker of absorbent pads, to ACON Investments. Novipax was formed by Atlas in 2015 to acquire the North American foam tray and absorbent pad businesses of publicly traded Sealed Air.

According to Novipax, it is the largest US producer of absorbent pads that are used in the packaging of fresh meat and poultry. In addition to these conventional pad products, the company also produces an array of specialty products with enhanced features that provide greater absorbency, shelf-life extension, theft sensors, odor reduction, and temperature resistance.

Customers of Novipax include protein processors, tray manufacturers, distributors and grocery chains. Novipax is headquartered near Chicago in Oak Brook, Illinois and operates four manufacturing facilities in Pennsylvania, North Carolina, Mississippi and California.

Novipax’s roots date back to 1965 when W.R. Grace acquired Wyomissing Paper to create its Formpac trays business. The first Formpac facility was built in 1966 in Reading, Pennsylvania, and the second was constructed in Indianapolis, Indiana in 1980. In 1988, W.R. Grace sold Formpac to Sealed Air which created a trays and absorbent pads division under the Cryovac brand. In 2015, Atlas Holdings formed Novipax to acquire Sealed Air’s trays and absorbent pads division. A year later, Novipax acquired Paper Pak Industries, a California-based maker of absorbent products used in the food, medical and safety applications.

The sale of Novipax to ACON excludes the company’s trays business which manufactures expanded polystyrene foam trays that are sold to food processors, supermarkets and food distributors. This business now operates as NPX ONE and is led by CEO Ron Leach, the former CEO of Novipax. NPX ONE is headquartered in Reading, Pennsylvania and has two production facilities in Indianapolis and Reading.

“NPX ONE is well-positioned to deliver superior service to the food producers who rely on us for their packaging needs, and we’re excited to begin this journey as a standalone business,” said Mr. Leach. “We also look forward to continuing our relationship with Novipax as a supplier of absorbent pads for the trays we produce at NPX ONE.”

“The sale of this market-leading absorbent pads business effectively illustrates a core Atlas investment strategy; acquire complicated assets in a corporate divestiture and then transform the company operationally, financially and culturally via a long-term partnership with a superb management team,” said Sam Astor, a partner at Atlas. “We could not be prouder of the work done by Novipax’s leadership and its entire workforce of skilled associates. While we’re sad to see great friends and colleagues leave the Atlas family, we are equally excited today to launch NPX ONE as a leading national protein tray company.”

Atlas is an industrial holding company that has more than 22 platform companies operating in a wide range of sectors with more than $8 billion in total revenues, more than 25,000 employees, and more than 200 facilities worldwide. The company was founded in 2002 and is headquartered in Greenwich, Connecticut.

ACON invests in middle-market companies in the United States and Latin America. The firm was founded in 1996 and has $5.6 billion of capital under management. ACON has US offices in Washington DC (headquarters) and Los Angeles, and international offices in Brazil, Columbia, and Mexico.

Houlihan Lokey was the financial advisor to Atlas on this transaction.

© 2020 Private Equity Professional | December 4, 2020

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