Sun European packages up £152m Paragon takeover

THE management and founders of Wisbechbased food packaging firm Paragon are in line for multi-million pound rewards for their enterprise after agreeing to the sale of their business to private equity firm Sun European Partners in a £152m deal.

Sun European, an arm of US-based private equity giant Sun Capital, is to take a majority stake in Paragon, which is currently 51pc owned by its management, including newlyappointed chief executive Mark Lapping and founder Tony Lennon who is staying on as an investor and an advisor.

The other major shareholders prior to the sale are Equistone Partners with 34pc and LDC, the private equity arm of Lloyds Banking Group, with 15pc.

The deal with Paragon is the second in the sector within days for Sun, which manages £5bn of assets worldwide.

Earlier this week it bought UK firm Rexam’s cosmetics packaging business for £286m.

Paragon was set up in 1994 and has 1,200 staff and sales of more than £170m, providing packaging for food retailers including Tesco, Waitrose, Asda and the Co-op.

A spokesman said no redundancies are on the cards as Sun wants to expand the business.

Chief executive Mark Lapping said: ‘We have exciting plans to develop the business in our existing and new product sectors as well as through further acquisitions.’

The two deals this week bring Sun’s total in the packaging sector worldwide to 34.

Sun has embarked on a round of fundraising and, according to reports, hopes to raise up to £1.4bn for a global fund by the end of this year.

The private equity outfit last year bought fashion chain Bonmarche, which was part of the collapsed Peacocks Group, in a deal that led to 1,400 job losses and 160 store closures.

It also owns clothing groups Jacques Vert and Alexon.

However, Sun was keen to stress it is involved in growth-oriented deals as well as trying to turn around distressed companies.