Zeus Packaging goes from war-torn Ukraine to a landmark deal with JJ O’Toole in Limerick

Zeus Packaging founder Brian O’Sullivan is a man on the move. On Thursday he signed a deal to acquire Limerick-based rival JJ O’Toole for an undisclosed sum.

The family-owned business, founded in 1914 and led by Vicki O’Toole, numbers Brown Thomas and its sister department store in the UK, Selfridges, among its customers, along with Dunnes Stores, Newbridge Silverware and Avoca. Financial details are closely guarded but latest abridged accounts show JJ O’Toole had accumulated profits of €2.1 million at the end of June 2021, and it employs 25 staff.

O’Sullivan said the combination would allow the businesses to continue to “deliver innovative and sustainable solutions for our combined customer base”.

O’Toole described the sale as a “very emotional decision” but the “time is right and I am very confident the company will continue its successful journey under the robust and global Zeus umbrella”.

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This deal follows two recent acquisitions in the UK for a combined €25 million and one in Canada in May. These transactions will help Zeus to book revenues of more than €400 million this year.

Last month O’Sullivan was in Monaco to represent Ireland at the EY World Entrepreneur of the Year awards, having won the Irish title last November. And last week he chaired a session with his various country managers in Austria.

On Saturday he travels to Australia to visit Zeus’s operations there and will follow that with a trip to New Zealand to visit its local business unit. Zeus has operations in 26 countries and employs 870 staff.

Ukraine operations

This includes four facilities in war-torn Ukraine, with Mr O’Sullivan making a flying visit there eight weeks ago to meet Zeus’s country manager and to show solidarity with his staff. It was quite the trek, involving a flight to Bucharest (where Zeus also has a business), hiring a car and driving across Romania and Moldova to cross the border into Ukraine.

Zeus has sites in Kyiv, Lviv, Odesa and one about 150 miles from the Donbas region. “I’ve been in contact with my country manager there from hour one of the war,” says O’Sullivan. “I went to Odesa myself to meet him face to face about eight weeks ago. I had to go and see my people who were there to make sure they were okay and that we were making the right decisions.”

For the first five or six weeks of the war, Zeus’s businesses were closed but its operations are back up and running now.

“We double-paid all our staff to make sure everyone was okay. And now we’re open and we’re trading and we’re at about 65 per cent of prewar levels,” he says, adding that some staff have been relocated to Zeus businesses in other countries, including Ireland.

The Zeus business in Ukraine supplies packaging to restaurants, small hotels and supermarkets. “Obviously the restaurant business has been impacted but we are dealing with two of the biggest supermarkets there and they are open.”

The business is not profitable for now, “but it’s not all about profits — it’s about what we do as a business”.

O’Sullivan crossed the border and then drove 20 minutes to Odesa to meet his colleague. “I couldn’t go any further. The tanks were there and that was a line of defence if the Russians came from that side.

“I met my country manager in a petrol station, and we had three or four hours together. It’s something that maybe wasn’t advisable from the point of view of safety but something I had to do from my perspective to see if my people were okay.”

Was he nervous crossing the border?

“There I was in a shirt and tie and suit in a red Toyota Yaris, and I explained what I was doing, that I wanted to see my staff. So they said, ‘Fine’ and ‘Try to get back out before nightfall because it gets more difficult then’. So I took their advice on that and I was back at the border again at 5pm that evening.

“It was a great business [before the war]. We had revenues there of approximately €12 million and growing, with ebitda of €1.5 million. We are definitely going to continue to support it and we are behind it for the future.”

Significant name

O’Sullivan says his family weren’t keen on the trip. “Of course they weren’t in agreement but it’s something from a business perspective that I felt I had to do. I’ve led my business from the front for 25 years and we are the largest single-shareholder packaging business in the world. I’m not able to sit in an office securely and not be out there myself.”

Back home, O’Sullivan is delighted to have secured the deal with JJ O’Toole.

Vicky O’Toole — an EY Entrepreneur of the Year finalist back in 2018 — and other senior managers will remain with the business, and the brand will be retained. “When I started my business in 1998, JJ O’Toole was a very significant name in the marketplace and a name I looked up to. It was one of my first customers,” says O’Sullivan. “They pride themselves as being a supplier of high-end packaging to premium companies in Ireland.”

He has his eye on other deals to expand the business. “I’m not finished. I’d like to believe in quarter one next year I could add a few more very strategic businesses to our portfolio.”

What’s the long-term plan? Is this something he might take to the stock market?

“Smaller packaging businesses have gone to the stock market. And much smaller. Could we take it to the stock market? Absolutely we could. Is it my plan as we sit here today? Absolutely not. I’m extremely satisfied and proud of what I have built. I’m 52 and I’ve a lot more to give to this business before any decision like that needs to be made.

“We are going in to clients now who need much more than packaging. We have 25 process engineers in Zeus, we’ve got 10 graphic designers, we’ve got IT people and marketing people. If you look at the raft of legislation that Europe is bringing to the table on packaging and sustainability and then you’ve got individual countries bringing in legislation. So we’ve pivoted to being a complete resource to a client. We sell them a complete solution around legislation and ESG. We want to be much more than a packaging business. That’s my goal and what I want to do over the next few years.”