New Joint Venture of Ivex Packaging Purchases Bagcraft

Ivex Packaging Corp. has formed a non-consolidated joint venture, Packaging Dynamics. Under the terms of the joint venture, Packaging Dynamics will acquire the assets of Bagcraft Corp. of America, an indirect, wholly owned subsidiary of ARTRA Group, Inc., for cash and subordinated promissory notes aggregating $91.5 million and the assets of Ivex's paper mill in Detroit for cash, subordinated promissory notes and a 49% equity interest in the venture aggregating $30.0 million. The remaining 51% of the joint venture will be owned by certain financial investors, including a minor investment by certain members of management of Ivex and Bagcraft.

With vertical integration, the joint venture will produce specialty bags and wraps for the food service, supermarket, bakery and retail industries. Additionally, the joint venture's Detroit mill will continue to supply products to the paper converting markets. The joint venture will capitalize on the shared resources of the two organizations to improve product development opportunities and further penetrate the flexible food packaging market.

The transaction has been approved by the board of directors of each company. The transactions are subject to documentation and customary conditions, including the approval of a majority of Artra's shareholders.

Ivex is a vertically integrated specialty packaging company that designs and manufactures value-added plastic- and paper-based flexible packaging products for consumer and industrial packaging markets. Bagcraft produces sandwich wraps, window bags, microwave popcorn bags and waxed bags with manufacturing facilities in Chicago and Baxter Springs, KS.