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Ball confirms it’s considering aerospace division sale

WESTMINSTER — Ball Aerospace and Technologies Corp., a major division of Westminster-based metal-packaging manufacturer Ball Corp. (NYSE: BALL), could soon be sold. 

The company, which operates a large and expanding aerospace campus in Boulder, confirmed this week that it is mulling its options for the business unit after Reuters reported that Ball was marketing its aerospace business to private equity firms and defense contractors with an asking price of about $5 billion. 

Ball is “considering options that could better position its aerospace business to provide value to shareholders and customers,” the company said in a news release. “There is no certainty that any formal decision will be made. If and when appropriate, a further announcement will be made.”

Wall Street has reacted mostly positively this week to speculation about Ball offloading its aerospace division, which was responsible for about 13% of the parent company’s net revenue last year. The prevailing wisdom from analysts is that a sale of the unit will reduce Ball’s debt and allow it to focus squarely on its can-manufacturing business. 

Increased attention to cans could help Ball’s bottom line, according to Zacks Equity Research, as customer-preference has begun to shift away from plastic bottles, which are now seen as less environmentally friendly than cans.

Ball, Zacks analysts said, is projecting global can volume to grow at an annual rate of 4% for the “foreseeable future,” and the company must beef up its capacity to meet that demand. 

Ball’s production capacity took a hit last year when it offloaded its Russian beverage-packaging business to the Arnest Group for $530 million. The move came amid an increasingly hostile global attitude toward companies doing business in Russia, which was then and remains today at war with neighboring Ukraine. 

There could be as many as 100 million new units produced globally by 2025, according to Zacks, and Ball thinks it could be responsible for manufacturing nearly half of that total. 

Ball recently used its backyard as a proving ground for a new, metal beverage product that aligns with consumers’ increased eco-consciousness: its line of recyclable aluminum cups, which made their public debut in 2019 during the University of Colorado football team’s home opener against the University of Nebraska.

Ball spent seven years developing the new cups, which are designed to be more environmentally friendly than the plastic cups typically used at stadiums. The company in 2019 opened a new manufacturing plant in Georgia dedicated to production of the aluminum cups.

“We take sustainability very seriously at Ball,” general manager Sebastian Siethoff told BizWest when the new cups hit the market. The development of the new cups is an example of Ball “riding the anti-plastic wave.”

The story of Ball Aerospace goes back 53 years to 1956 when Ball Brothers Research Corp., as the company was known then, took Boulder city officials up on their push to recruit companies to a new industrial park east of town. 

Upon arriving in town, staff with Ball Corp., then based in Muncie Indiana, learned about local scientists doing military research on space exploration at the University of Colorado in what would later be known as the Laboratory for Atmospheric and Space Physics.

They had discovered how to build a stable platform to attach equipment and cameras to rockets sent into the upper atmosphere. Ball’s Boulder team, led at the time by R.C. “Merc” Mercure, saw an opportunity. 

By 1959, the company had built the nation’s first orbiting solar observatory for a new government agency called the National Aeronautics and Space Administration, or NASA.

More than six decades later, nearly 1,000 Ball Aerospace employees work from the company’s Boulder campus, a total that could roughly double in the next 10 years with the expansion of Ball’s Arapahoe Road operations.

Should Ball Aerospace and Technologies Corp. be severed from the parent company, it’s unclear what impact that would have on the Boulder expansion effort. Company representatives did not immediately respond to requests for comment Friday.

Ball Aerospace, according to plans approved by Boulder city officials last year, intends to add 310,000 square feet of new building space to its campus at the roughly 27-acre site on the north side of Arapahoe Road between 48th Street and Range Street. That would bring the total square footage to just under 751,000.In 2019, Ball — the parent company, not specifically the aerospace division — broke ground on a new four-building, 186,000-square-foot Westminster headquarters located at the existing site of Ball’s Packaging Office Center at 9343 W. 108th Circle in Westminster. The same year, the firm unveiled plans to add 137,000 square feet of office and research and development space to Ball’s existing roughly 121,000-square-foot Broomfield R&D operation on 10 Longs Peak Drive.

Source: BizWest