US food company McCormick & Co looks set to sell its packaging activities to Kerr Group in a transaction valued at $142.5 million.
The deal includes the assets of McCormick's Tubed Products and Setco, which manufacture custom and stock plastic bottles, plastic squeeze tubes and plastic closures for the vitamin, pharmaceutical, food and spice and personal care markets.
Kerr is best known in the pharmaceutical industry for its child-resistant and tamper evident packaging products, and it is a major supplier of vials and plastic medicine bottles to the likes of Merck & Co, Bayer and Pfizer.
Richard Hofmann, Kerr's chief executive, said: "the complementary nature of these businesses in terms of customer base and products creates substantial prospects for synergies and will bring to our customers a broader array of products and services".
Under the terms of the agreement, Kerr will pay $132.5 million in cash upon completion of the sale, expected in the third quarter of this year, and the remaining $10 million will be paid over five years based on meeting performance objectives.