M&As: Wendel to sell Constantia Flexibles to One Rock Capital for EUR1 bn; Techmer acquires colour/additive compounder

European listed investment firm Wendel has signed an agreement to sell flexible packaging firm Constantia Flexibles to an affiliate of US-based One Rock Capital Partners for EUR1.1 billion. Under its ownership, Wendel supported Constantia Flexibles in its external growth strategy, with 11 acquisitions in ten countries.

The group produces flexible packaging solutions for a diversified portfolio of customers in the consumer and pharmaceutical industries. The company has a team of over 7,000 employees and operates in more than 20 countries.

The company will be sold for a price that yields net proceeds for Wendel of EUR1.1 billion reflecting a multiple of 1.94 times Wendel’s total investment in Constantia Flexibles since 2015, with net proceeds being EUR84 million above Constantia Flexibles’ valuation.

In 2015, Wendel finalised the acquisition of Constantia Flexibles for an enterprise value of EUR2.3 billion, and invested EUR640 million in equity for a 73% stake in the company, alongside the AREPO Foundation’s EUR240 million, or 27% investment, and syndicated a minority share of Maxburg Capital Partners’ (MCP) investment, an investment company backed by the RAG Foundation.

Accordingly, in November 2015, MCP acquired approximately 11% of the capital of Constantia Flexibles from Wendel for EUR101 million. Following this transaction, Wendel, the AREPO Foundation and MCP subsequently participated in a EUR50 million capital increase for Constantia Flexibles, each subscribing to a pro-rata stake, to finance the acquisitions of Afripack and Pemara. Following the capital increase and MCP’s investment in Constantia Flexibles, Wendel’s equity investment in Constantia Flexibles totaled EUR565 million. Wendel is the company’s controlling shareholder, with 60.8% of the share capital.

In 2017, Constantia Flexibles sold its Labels business to Multi-Color Corporation. This value-creating transaction gave the company additional resources to bolster its growth strategy in the flexible packaging market, where it is a leader in segments such as confectionery foils, die-cut lidding, alu-container systems and pharma foil.

One Rock Capital Partners is a private equity firm that makes controlling investments in companies with potential for growth and operational improvement. The firm has experience in various industries, including chemicals, manufacturing, business services, and healthcare.

The closing of the transaction should take place during the second half of 2023, subject to the satisfaction of the contractual conditions precedents, including the clearance by regulatory authorities.

For more than eight years, Wendel has supported Constantia Flexibles in its ESG challenges, and more specifically in the issues of the circular economy and the fight against climate change. As a result, since 2018 the Austrian group has had a greenhouse gas emissions reduction trajectory approved by the SBTi. 85% of its products are designed for recycling or have a recyclable alternative.

In other news, US-based polymer materials design company Techmer PM, has announced that it has signed an agreement to acquire colour and additive compounder Advanced Color Technologies (ACT). The combined technology and capabilities of the two organisations will expand Techmer’s position in colourants and additives in the synthetic fibres segment. The deal is expected to close by August 31. Terms of the transaction were not disclosed.

Located in Dalton, US, Advanced Color Technologies designs, formulates, and supplies specialty colourant and additive systems.

This acquisition demonstrates Techmer’s commitment to the fibres and plastics industries through investment to stimulate continued innovation in the market.

Techmer expects this acquisition to improve its customers’ experience with added resources in synthetic fibres and other industries with the expansion of sales, marketing, technology, and manufacturing capabilities.

The addition of Advanced Color Technologies is part of Techmer’s strategic plan to grow its markets in attractive, technology-oriented industries, it adds.

Founded in 1981, Techmer PM is a materials design company specialising in modifying and fine-tuning the properties of technical polymers, from polyolefins to PEEK.

(PRA)

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