CVC Capital Partners is buying bottle packaging company Anchor Glass Container Corp. from KPS Capital Partners LP. The deal, worth more than $1 billion, is part of a partnership with BA Glass, a maker of glass containers.
Anchor Glass, headquartered in Tampa, Florida, is a U.S. manufacturer of glass packaging. The target services blue chip companies covering the beer, food and beverage, liquor, and ready-to-drink products. Anchor Glass has six manufacturing facilities, 11 furnaces, and 31 machines that help produce nearly 5 billion glass containers a year.
BA Glass also manufactures glass bottles from its eight facilities across Portugal, Spain, Poland and Germany. In 2015, the glass company accumulated approximately $590 million in sales. In 2016, the glass bottle maker agreed to purchase the glass container division of Yioula and also purchased Germany-based Agenda Glass. The deal with CVC is expected to help Anchor Glass capitalize on market opportunities as the target enters its next phase of development.
CVC Capital, the London private equity and investment advisory firm, has raised more than $65 billion in commitments since the firm inception in 1981. The firm has completed over 300 investments and currently invests in companies such as BJ’s Wholesale Club and Petco. In February, CVC raised a $1 billion middle market investment fund to invest in tech companies; and later CVC-backed Avast Software made a $1.3 billion deal to acquire AVG Technologies NV (NYSE: AVG) for its security software services.
KPS invested in Anchor Glass in 2014 and has since grown the target’s business with a 50 percent profit increase. Based in New York, KPS has approximately $5.5 billion in assets under management and looks to make control equity investments in specialty manufacturing companies. The firm also collaborates with major industrial and service unions to sponsor transactions.
Packaging M&A has been holding strong lately, largely driven by companies looking to expand into new markets. Berry Plastics Group Inc. (NYSE:BERY) agreed to buy AEP Industries Inc. (Nasdaq: AEPI), a maker of flexible plastic films used to package consumer goods, for $765 million in cash and stock; Novolex, backed by Wind Point Partners, purchased Heritage Bag Company; Packaging Corp. of America (NYSE: PKG) said it will purchase TimBar Corp.; Platinum Equity has agreed to acquire the foam plastics and flow control devices divisions from Broadway Industrial Group.
Morgan Stanley (NYSE: MS) and Citigroup (NYSE: C) are serving as financial advisers to CVC and BA Glass, while Baker & McKenzie is acting as legal counsel. Paul Weis Rifkind Wharton & Garrison LLP is acting as legal counsel to KPS and Anchor Glass, while JP Morgan Securities LLC (NYSE: JPM) and Credit Suisse Securities LLC are acting as financial advisers. The deal is expected to close by year end 2016.