Under a deal announced last week private equity firm Sun European Partners has acquired a majority stake in Paragon replacing the company’s previous arrangement, which saw the management team owning a 51% share in the business and co-investors Equistone Partners Europe and LDC with 34% and 15% respectively.

Neither Sun European nor Paragon, which has a turnover of more than £170m, revealed the value of the deal, although it is rumoured to be worth around £150m.

Paragon is one of 34 investments in the packaging sector which Sun Capital, the US-based group to which Sun European is adviser, has made since it was founded in 1995.

Following the deal Paragon’s managing director Mark Lapping has stepped up to the role of group chief executive while the company’s founder Tony Lennon will remain an investor in the business in a management support role.

Lapping said that the arrangement, which will see Paragon continue to operate as a "stand alone business", was extremely positive and would provide synergies for Paragon working with Sun’s other packaging firms.  

He added: "They have a number of other businesses in their portfolio with which we can work. It is still early days in terms of how that will develop."

Paragon Print and Packaging currently employs more than 1,200 staff over 10 manufacturing sites in the UK and Lapping said that with Sun European’s backing the business was in a strong position to grow.

He added: "They really understand packaging so they bring the expertise to help us develop our future growth plans, which include overseas expansion, as well as being able to invest in the areas that we want to invest in both on the plant machinery and people side and in future acquisitions."

Established in 1994 Paragon Print and Packaging has been a private equity backed company since 2001 when Equistone invested €12m for a 50% stake. Since then it has made deals in 2005 and 2007, making this the fourth in a line of similar private equity deals.

Partner at Moorgate Capital Nicholas Mockett, who advised Paragon on its acquisition of the flexible packaging business from US-based EPL as well as its deal with Equistone, said that Paragon’s key differentiators are customer service and a multi-product offering.

He added: "Paragon is the UK market leader in labels and also operates in the flexibles and carton sleeve market. Since inception by the charismatic Tony Lennon, it has made a series of acquisitions in the labels industry and other packaging acquisitions."

"With the investment of a packaging oriented private equity house Paragon Print and Packaging looks set to continue its impressive growth rate."

Meanwhile Sun European also announced that affiliate firm Albea has acquired the cosmetics division of Rexam’s personal care business, a deal rumoured to be valued at around $459m.

Rexam Personal Care, which produces dispensing systems and make up packaging for the cosmetic and personal care markets, operates 11 plants across Europe, the Americas and Asia.

Sun Capital Partners declined to comment on either acquisition.