Swiss packaging company SIG Combibloc is acquiring U.S.-based privately held Scholle IPN for an enterprise value of 1.36 billion euros ($1.53 billion) to boost its position in sustainable packaging, it said on Tuesday.
A leader in aseptic food packaging, SIG said the deal would help it increase its presence in the United States, where Scholle generates 55% of its sales, and bring Scholle’s sustainable bag-in-box – used largely to transport liquids – to Asia and Latin America.
Group revenue should keep growing by 4-6% per year over the medium term, while profitability – under pressure from increasing input costs – is expected to dip temporarily before recovering to over 27%, Chief Executive Samuel Sigrist told Reuters.
“This is a strategic acquisition, but we are now focused on driving organic growth on this new platform,” he said.
Sigrist said price increases, efficiencies and cost synergies would help improve margins and offset input costs.
The enterprise value, equivalent to a multiple of 14.5 times adjusted earnings before interest, tax, depreciation and amortisation (EBITDA), will be funded through 33.75 million SIG shares from existing authorised capital and 370 million euros in cash and debt refinancing, the company said.
It will also issue equity of around 200 million-250 million euros.
Scholle’s current owner Laurens Last will become SIG’s biggest shareholder with a 9.1% stake, subject to a lock-up period. He will also join SIG’s board.
The acquisition, due to close before the end of the third quarter, is expected to contribute to cash flow and earnings per share from the first year after completion. Sigrist said he did not expect any regulatory hurdles.
Sigrist said the company would propose raising its dividend to 0.45 Swiss francs ($0.4874) per share for 2021 from 0.42 francs in 2020.
UBS Investment Bank acted as financial adviser to SIG, and Latham & Watkins and Advestra as legal advisers.
Source: Reuters.com