Silgan Holdings Inc. (Nasdaq: SLGN), a packaging company for the consumer goods industry, has reached a deal with WestRock Company (NYSE: WRK) to purchase its closures and dispensing systems business. The deal, worth nearly $1.03 billion, is expected to close late in the first quarter of 2017.
WestRock is a global provider of paper and corrugated packaging products. The target designs and manufactures spray bottles, folding cartons, displays, paperboards, containerboards, kraft paper, tissue and other pulp materials. Headquartered in Norcross, Georgia, WestRock employs approximately 39,000 team members and operates from its 250 production facilities, design centers, research labs and sales offices across ten countries. The deal for WestRock’s closure franchise will expand the buyer’s dispensing materials business.
“This acquisition significantly enhances the scope and breadth of our market leading closure franchise by bringing new capabilities in the highly engineered dispensing systems category,” states Silgan CEO Tony Allott. “This acquisition allows us to further build relationships with common global customers, provides significant opportunities for cost synergies, creates an incremental platform for growth and strongly enhances our free cash flow.”
Silgan, based in Stamford, Connecticut, is a maker of rigid packaging for shelf-stable food, beverages and other consumer goods products. The buyer operates from three business lines, which include: metal containers, closures, and plastic containers. Silgan’s metal business is used primarily by food processors packaging soups, vegetables, fruit, meat, tomato-based products, seafood, coffee, adult nutritional drinks, pet foods and other miscellaneous food products.
Packaging M&A has been holding strong lately, largely driven by companies looking to expand into new markets. Relevant deals include: CVC Capital Partners’ purchase of bottle packaging company Anchor Glass Container Corp. from KPS Capital Partners L.P.; 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.