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Blackstone's GSO sells Stolle Machinery

by Renee Cordes | Published September 30, 2011 at 8:58 AM

Japanese metal and plastic container maker Toyo Seikan Kaisha Ltd. said Friday, Sept. 30, it has agreed to buy Centennial, Colo.-based Stolle Machinery Co. for about $775 million as it seeks to offset a slump at home with expansion overseas.

The Tokyo-based buyer is purchasing the maker of machinery for the can-making industry from majority shareholder GSO Capital Partners LP, which has been owned by Blackstone Group LP since 2008.

Toyo Seikan, which will fund the deal from cash and bank debt, said it is looking to the acquisition to expand in North America and Europe as well as in the Middle East, Latin America, Asia and Africa.

Speaking to journalists in Japan, Toyo Seikan president Shunji Taneko said the move was motivated in part by the strengthening yen, which has made it difficult to sell machinery equipment abroad.

He added that the company "will aggressively consider" further mergers and acquisitions "if there are business opportunities, even in areas other than metal can-making." He added that the company plans to spend around ¥100 billion ($130 yen over the next decade or so pursuing deals.

The buyer said it will structure the purchase as a reverse merger, whereby Can Machinery Holdings Inc., which indirectly holds all of the target's shares, will merge with TSK Merger Corp., a special-purpose vehicle established by Tokyo Seikan in the U.S.

Once the deal is completed before the end of this year, Stolle will become a wholly owned subsidiary of Tokyo Seikan.

With $24 million in fiscal 2010 sales, Stolle is the leading supplier of high-technology equipment and services to the beverage, food and consumer metal-container industries. The company (whose name rhymes with "Molly") is named for Ralph J. Stolle, the inventor of the so-called pop-top can who founded the Stolle Corp. in Sidney, Ohio, in 1961. The company has been known as Stolle Machinery Co. since 2004. It had 421 employees as of Dec. 31, 2010.

Toyo Seikan, established in June 1917, posted a ¥4.38 billion net loss for the year ended March 31, compared with a profit of ¥8.32 billion a year earlier. It employs more than 4,800 people.

On Friday, Toyo Seikan shares fell 3.33% to trade at ¥1,189, for a market capitalization above ¥257.5 billion.

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