Packaging M&As: Sonoco expands with new acquisition; Linpac up for sale

US-based packaging company Sonoco has acquired Plastic Packaging Inc. (PPI), a privately held flexible packaging company also in the US. Terms were not disclosed.

Founded in 1957, PPI specializes in short-run, customised flexible packaging for consumer brands in markets including: food products (i.e. frozen foods, baked goods, seafood), pet products (i.e. dry food, bird seed, litter), confection (i.e. seasonal promotions, heat-sealed chocolate packaging, hard and soft candy) and health and personal care (i.e. nutraceuticals, diapers, tissues/wipes).

PPI expects 2016 sales of approximately US$42 million and operates two manufacturing facilities with approximately 170 employees.

Through the acquisition, Sonoco says it gains additional lamination, wide and narrow web flexographic printing, and pouch and bag forming capabilities that will allow it to better serve its current customers, while expanding its customer base.

“This acquisition grows our flexible packaging assets in the southeast US, adding short-run capabilities that allow us to offer additional speciality and customisation capabilities to our customers,” said Rob Tiede, Sonoco’s senior vice president for Global Consumer Solutions. “PPI complements Sonoco’s existing technologies and leverages our expertise in flexible packaging, while expanding our customer base in complementary markets.”

Founded in 1899, Sonoco has annual net sales of nearly US$5 billion and 20,800 employees working in more than 300 operations in 35 countries.

Linpac owner seeks buyer

In a related report by Reuters agency, US hedge fund firm Strategic Value Partners (SVP) has placed UK-based food packaging group Linpac up for sale in a potential EUR500 million deal led by investment bank Rothschild.

The report says that bidders could be other private equity investors that already own packaging assets such as PAI, Blackstone, CVC or Lindsay Goldberg.

Linpac expects to post earnings before interest, taxes, depreciation and amortization (EBITDA) of just below EUR60 million this year, and some of the bids are expected to value the company at 8 times that, around EUR480 million, says Reuters.

Linpac was previously owned by Montagu Private Equity, which bought it in 2003 from the founding family shareholders. SVP took over Linpac in 2014 for US$1 billion.

Linpac has 2,500 employees and operates across a network of 18 manufacturing sites and 23 sales operations servicing 71 countries.

Meanwhile, in 2014, another SVP-owned packaging firm Klöckner Pentaplast was taken off the market, after SVP was reported to have received offers well below its asking price of EUR1.5 billion.

(PRA)