The Ontario Teachers' Pension Plan snapped up the global market leader in another obscure but cash-spinning business, announcing on Monday that it purchased Exal Group, the largest specialty manufacturer of aluminum containers in the world.
Teachers' Private Capital, an arm of the $87-billion Toronto-based plan, teamed up with U.S. private equity firm Stonebridge Partners to buy Exal from its founder, Delfin Gibert. No terms were given on the transaction, but the buyers did say that Exal has annual sales of $400-million (U.S.).
"Delfin Gibert has built the leading global producer in its industry with strong leadership and a proven track record for growth. We are delighted to partner with the company at this important stage of its evolution," Erol Uzumeri, senior vice-president at Teachers' Private Capital, said in a press release. The private equity group already owns companies that are market leaders in mattress making, vitamins, construction equipment and commercial laundry machines.
Exal makes aluminum containers for customers that include beer and soft drink companies, along with household products and personal care companies. The company was founded in 1993 and has six facilities and 47 manufacturing lines in the U.S., Europe and Argentina. It produces approximately 1.3 billion units a year.
The Teachers' fund pays pensions to a relatively mature work force, with 173,000 active teachers, and 182,000 retired or inactive members. To generate the cash needed to meet this promise - the fund paid out $4.2-billion last year to retired members - Mr. Uzumeri and his colleagues have purchased a number of companies that spin out a relatively stable, dependable supply of cash in recent years.