AptarGroup, Inc.

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AptarGroup, Inc.

475 West Terra Cotta Avenue, Suite E.
Crystal Lake, Illinois 60014
U.S.A.
Telephone: (815) 477-0424
Fax: (815) 477-0481
Web site: http://www.aptar.com

Public Company
Incorporated: 1993
Employees: 6,600
Sales: $1.11 billion (2003)
Stock Exchanges: New York
Ticker Symbol: ATR
NAIC: 326122 Plastics Pipe and Pipe Fitting Manufacturing; 332115 Crown and Closure Manufacturing; 332919 Other Metal Valve and Pipe Fitting Manufacturing; 332999 All Other Miscellaneous Metal Product Manufacturing; 333913 Measuring and Dispensing Pump Manufacturing; 339999 All Other Miscellaneous Manufacturing

AptarGroup, Inc. makes a number of dispensing systems for consumer products in the personal care, fragrance/cosmetic, food/beverage, pharmaceutical, and household markets. AptarGroup's business is divided in three segments, aerosol valves, pumps, and dispensing closures. The company counts itself as the largest supplier of fine mist pumps in the world, the largest supplier of aerosol valves in North America, and the largest supplier of dispensing closures in the United States. AptarGroup maintains manufacturing facilities in North America, Europe, Asia, and South America, serving more than 5,000 customers. International sales account for 60 percent of the company's annual sales. Pumps represent AptarGroup's biggest business segment, accounting for 58 percent of its total sales. Dispensing closures and aerosol valves account for 23 percent and 14 percent of total sales, respectively.

Origins

AptarGroup comprises a collection of companies founded at different times in distinct business niches that, over the course of decades, came together under the AptarGroup corporate banner, which first was unfurled in 1993. AptarGroup's lineage included the names Werner Die & Stamping, Seaquist Manufacturing Company, Pfeiffer GmbH, and Valois S.A.—U.S., German, and French companies that together gave AptarGroup its 21st century profile of a company reliant on aerosol valves, spray pumps, and dispensing closures. Aerosol valves represented the oldest facet of AptarGroup's business, a chapter of the company's history that was begun by Werner Die & Stamping.

Several months after the end of World War II, Nels Werner Seaquist and Alex Werner Carlson set in motion the events that led to AptarGroup's formation a half century later. Both men worked for a company named Oak Manufacturing Co. in Crystal Lake, Illinois, where they developed their skills in tool and die manufacturing. Seaquist and Carlson possessed enough confidence in their abilities to leave Oak Manufacturing and start their own company, using their shared middle names to christen the enterprise Werner Die & Stamping. In January 1946, the company began operating in Cary, Illinois, occupying a 20-foot by 30-foot garage where Seaquist and Carlson began working on a line of aerosol valves. The entrepreneurs made their first shipment in 1948, when they supplied a company in Chicago named Continental Can Company with low-pressure aerosol valves. By the end of the year, Werner Die produced six million aerosol valves, enabling the company to finance the construction of a 5,000-square-foot manufacturing plant in 1949.

Seaquist decided to go it alone several years after working with Carlson. In 1952, after acquiring tooling from Continental Can Co., he formed his own company, Seaquist Manufacturing Company. Under Seaquist's guidance, the company developed a new valve comprising parts made of molded plastics with molded orifices, a product known as the NS-31. Seaquist's innovative work caught the attention of a privately held, family-controlled company in Chicago named Pittway Corporation. Founded by the Harris family, Pittway eventually became the world's largest manufacturer of fire and burglar alarm systems, but the company delved into other businesses as well, developing interests in publishing, trade show presentations, and consumer electronics. Pittway's acquisition of Seaquist Manufacturing, which subsequently was renamed Seaquist Valve, became the foundation of its packaging operations, an arm of the company that would increase in size and scope during the ensuing decades.

Expansion Through Acquisitions in the 1970s

With the financial help of a larger parent company, Seaquist Valve expanded, developing business arms of its own. The first division of the company was established in 1968, when Seaquist Canada was formed. The international dimension to the company's business—an important facet of AptarGroup decades later—widened in scope when Pittway began augmenting Seaquist Valve's growth with acquisitions. These acquisitions represented the constituents of the modern-day AptarGroup. The first to arrive was a French company named Valois S.A. The company was founded in 1947 by Jean Ramis, who held a patent on a plastic aerosol valve. Pittway acquired the company in 1970, giving its packaging operations a presence in the United States through Seaquist and in Europe through Valois. Pittway, at this point, had limited its packaging operations to the production of aerosol valves, but in the mid-1970s the company began to diversify, giving its packaging operations the same three business pillars that supported AptarGroup. In 1976, Seaquist Closures was established as a separate division, assigned to manufacture dispensing closures, which were plastic caps typically used for squeezable containers that allowed a product to be dispensed without removing the cap. That same year, Pittway purchased a 35 percent stake in Pfeiffer GmbH, a German company engaged in the manufacture of pumps—finger-actuated dispensing systems that dispersed spray or lotion from non-pressurized containers. Pfeiffer, like Valois, was founded in 1947, starting in Munich where its founder, Erich Pfeiffer, began building one of the packaging industry's pioneers. Pfeiffer GmbH developed the first metal pump in 1952 and the first leak-proof dispenser pump in 1960. Several years before Pittway acquired the company, Pfeiffer GmbH developed the first nasal spray pump, presumably the reason the Harris family took an interest in the company.

During the 1970s, Pittway diversified its packaging operations. In the 1980s, the company entrenched its position in three main product lines: aerosol valves, spray pumps, and dispensing closures. The company did so through internal expansion by fostering the growth of Seaquist divisions, Valois, and, to a lesser extent, through its partially owned pump maker, Pfeiffer. Pittway also solidified the three business segments by completing acquisitions of other companies, acquisitions that added technology, new markets, and manufacturing capacity to its packaging operations. In 1981, Pittway acquired two U.S. companies, AR Valve, a manufacturer of aerosol valves, and RDW Industries, a maker of dispensing closures. Through Valois, Pittway purchased a French manufacturer of spray pumps named STEP S.A., completing the acquisition in 1983. In 1989, Pittway completed the purchase of another spray pump manufacturer, acquiring an Italian company, SAR S.p.A.

The 1990s saw Pittway's packaging operations gain their independence, the moment that marked the birth of AptarGroup. Pittway, for its own strategic reasons, was peeling off layers of itself, embarking on a divestiture program that would see it shed its diversity. The company sold its consumer electronics business and packaging operations during the early 1990s, a subsidiary named First Alert, Inc. in 1994, and its publishing and trade show assets in 1998. At the close of the century, after winnowing its business scope, Pittway was acquired by Honeywell, Inc.

AptarGroup's Debut in 1993

The multi-step process that resulted in the formation of AptarGroup began at the beginning of Pittway's divestiture program. In 1992, Seaquist Valve and Seaquist Pump, a division formed in 1987, were merged, creating Seaquist Dispensing, a subsidiary of Seaquist Group. In April 1993, Pittway spun off Seaquist Group and concurrently acquired the 65 percent of Pfeiffer it did not already own. The new, independent company, which began trading on the New York Stock Exchange, was renamed AptarGroup, a reference to the Latin word "aptare," to "adapt and respond." The company debuted with more than $400 million in annual sales.

On its own for the first time in 30 years, the packaging operations expanded, achieving significant growth during its first decade of independence. The company's established presence in Europe was augmented by expansion into other areas of the world, as AptarGroup acquired manufacturing space in Mexico, the Czech Republic, China, Argentina, and Brazil. In 1995, the company acquired 35 percent of Loffler Kunststoffwerk GmbH & Co., a leading manufacturer of dispensing closures in Europe.

Company Perspectives:

AptarGroup delivers solutions that bring convenience to life. Your life. We supply leading multinational companies with innovative spray pumps, dispensing closures, nasal pumps, aerosol valves and lotion pumps. We partner with customers at the early phase of a product's packaging design and aid them in selecting the best solution for their needs. Our dispensing systems are assembled using sophisticated high-speed machines and robots and our plastic injection molding expertise achieves extraordinary results.

As AptarGroup entered the late 1990s, the company represented a formidable, global force in the consumer products packaging industry. By the end of 1996, AptarGroup served more than 1,000 customers, supplying three categories of products to a variety of markets. Pumps represented the single most important facet of the company's business, accounting for 63 percent of the $615 million collected in sales in 1996. More than 90 percent of the company's pumps were manufactured in Europe. AptarGroup's pumps were sold to the fragrance/cosmetics market, the pharmaceutical market, and the personal care market. In each of these markets, the company held a leading position. AptarGroup counted itself as the largest supplier of pumps to the fragrance/cosmetics market in Europe. The company ranked as the world's largest supplier of pumps to the pharmaceutical market, relying on clean-room manufacturing facilities in France, Germany, and Switzerland. In the personal care market, AptarGroup ranked as the largest supplier of fine mist pumps in North America and a leading supplier of lotion pumps in Europe.

For the remaining 37 percent of its revenue, AptarGroup relied on the sale of dispensing closures and aerosol valves, its original product line. The company sold its closures to the same markets it sold its pumps, but the majority of its customers operated in the personal care market. AptarGroup manufactured nearly 80 percent of its closures in North America, ranking as the largest supplier of closures on the continent. The product line accounted for approximately 18 percent of AptarGroup's total sales. The company's aerosol valve business, which contributed 17 percent of total sales, ranked as the largest in North America. AptarGroup manufactured nearly 60 percent of its aerosol valves in North America, selling the product line to the personal care, household, and pharmaceutical markets.

Expansion in Late 1990s and 2000s

AptarGroup expanded its business base during the late 1990s, completing a series of acquisitions and starting several ventures of its own that yielded consecutive years of record financial totals. In 1997, the company established two start-up operations, CosterSeaquist L.L.C., a U.S.-based aerosol spray cap manufacturer started as a joint venture company, and Aptar Suzhou Dispensing Systems, Co., Ltd., a company based in China that manufactured all three categories of AptarGroup's products.

AptarGroup ended the 1990s by using a combination of acquisitions and start-up ventures to help push annual sales past the $800 million mark. The company's emerging presence in South America was bolstered by the founding of a subsidiary in Brazil in 1999, Seaquist-Valois do Brasil Ltda., which manufactured dispensing closures and pumps. The year also included the acquisition of Somova, S.r.l., a Milan-based manufacturer of pumps and aerosol spray caps, and the purchase of an 80 percent stake in a Swiss research and development company, Microflow Engineering S.A. The year's biggest deal was completed in February, when AptarGroup purchased a U.S.-based perfume pump maker named Emson Research Inc. The acquisition, a $150 million deal, gave AptarGroup a handful of manufacturing plants in Connecticut, but the greatest contribution to the company's operations was Emson's strong presence in the mainstream U.S. fragrance pump market. At the time of the acquisition, AptarGroup derived 55 percent of its fragrance pump sales from Europe, maintaining a solid position in the U.S. market only in the smaller upscale end. Emson, which generated $85 million in sales before its acquisition by AptarGroup, derived 75 percent of its sales from the United States, ranking as the largest manufacturer of fragrance/cosmetics pumps in the country. "This acquisition gave us balance," AptarGroup's chief financial officer said in a February 22, 1999 interview with Plastics News.

As AptarGroup moved toward its tenth anniversary, the company was recording impressive financial growth. Innovations such as AptarGroup's design of a squeeze bottle with a silicon valve dispenser on the bottom for ketchup maker H.J. Heinz Co. and for mayonnaise maker Kraft Foods Inc. sparked growth in the company's business. In 2003, thanks to a 20 percent increase in revenues, the company eclipsed the $1 billion-in-sales mark, recording $1.11 billion in sales. To maintain its stalwart market position, AptarGroup planned to keep entering new markets and develop innovative solutions for consumer products packaging, as it attempted to remain on the vanguard of an industry it had helped advance for nearly 60 years. Toward this end, the company was moving into new markets as it entered the mid-2000s. In the first half of 2004, AptarGroup opened its first plant in Russia, a 50-employee factory in Vladimir that made dispensing closures for food and beverage and personal care companies. As the company plotted its future development, growth in markets outside of the United States and Western Europe represented one of the objectives to be fulfilled. AptarGroup generated only 9 percent of its sales outside of the United States and Western Europe in 2004, a percentage that the company's president and chief executive officer, Carl A. Siebel, wanted to increase. "The goal is for the rest of the world, Eastern Europe included, to represent at least 20 percent of our sales within five years," Siebel said in a May 17, 2004 interview with Crain's Chicago Business.

Principal Subsidiaries

AptarGroup International L.L.C.; AptarGroup International Holding B.V. (Netherlands); AptarGroup Holding S.A.S. (France); Valois S.A.S. (France); Asia Pacific Inspection Center (Suzhou) Co. Ltd. (China; 55%); Aptar Suzhou Dispensing Systems Co. Ltd. (China); SeaquistPerfect Molding L.L.C.; Emson Research, Inc.; Global Precision, Inc.; Liquid Molding Systems, Inc.; Philson, Inc.; Pfeiffer of America, Inc.; P Merger Corporation; Seaquist Closures L.L.C.; Seaquist Closures Foreign, Inc.; Seaquist de Mexico S.A. de C.V. (80%); SeaquistPerfect Dispensing L.L.C.; SeaquistPerfect Dispensing Foreign, Inc.; Valois of America, Inc.

Principal Competitors

Amcor Limited; Crown Holdings, Inc.; Rexam Plc.

Key Dates:

1946:: Werner Die & Stamping, AptarGroup's earliest predecessor, is founded in Cary, Illinois.
1947:: Valois S.A. is founded in France and Pfeiffer GmbH is founded in Germany.
1964:: Pittway Corporation buys the business begun in Cary, Illinois.
1970:: Pittway acquires Valois.
1976:: Pittway acquires 35 percent of Pfeiffer.
1993:: Pittway's packaging operations are spun off as AptarGroup.
1999:: Emson Research, Inc. is acquired.
2003:: Annual sales eclipse $1 billion.