Debt markets are driving up multiples for companies that make product packaging. Activity in the sector has been constant in 2014. Targets have included Mauser, which makes drums for transporting chemicals, and Pretium Packaging, which manufactures plastic containers. As the trend continues, driven in part by easy access to capital, multiples have swelled for companies that may not be in the top tier.
Packaging acquisitions are generally attractive to investors, according to Frank Winslow, a partner at Charlottesville, Virginia-based private equity firm Quad-C. “People view it as low downside,” Winslow says. The firm sold Technimark, which manufactures custom rigid packaging, to private equity firm Pritzker Group Private Capital in April for an undisclosed amount. According to Winslow, the sales process was very competitive.