{"id":6872,"date":"2022-11-02T04:24:25","date_gmt":"2022-11-02T04:24:25","guid":{"rendered":"https:\/\/cpmirror.com\/?p=6872"},"modified":"2022-11-04T14:17:53","modified_gmt":"2022-11-04T14:17:53","slug":"packaging-firm-sealed-air-to-buy-liquibox-for-1-15-bln-in-qsr-push","status":"publish","type":"post","link":"https:\/\/cpmirror.com\/index.php\/2022\/11\/02\/packaging-firm-sealed-air-to-buy-liquibox-for-1-15-bln-in-qsr-push\/","title":{"rendered":"Packaging firm Sealed Air to buy Liquibox for $1.15 bln in QSR push"},"content":{"rendered":"\n<ul class=\"wp-block-list\">\n<li>Combination of Cryovac and Liquibox to accelerate the growth of sustainable packaging solutions for the $3 Trillion Fluids &amp; Liquids industry<\/li>\n\n\n\n<li>Highly strategic transaction powers SEE\u2019s vision to become a world-class, digitally-driven company automating sustainable packaging solutions<\/li>\n\n\n\n<li>Liquibox is a global leader in Bag-in-Box solutions and engineered fitments and dispensers<\/li>\n\n\n\n<li>Liquibox estimated full year 2022 revenue and Adj. EBITDA of $362M and $85M, respectively<\/li>\n\n\n\n<li>Anticipated cost synergies of $30M annually to be implemented before the end of year three (3) post-closing<\/li>\n\n\n\n<li>Liquibox expected to grow at 6-8% CAGR, and once combined with Cryovac Fluids &amp; Liquids business, to grow at double digit rates benefiting from the complementary solutions portfolio, technologies and operations<\/li>\n\n\n\n<li>Combination unites two aligned, high-performance growth and innovation cultures<\/li>\n\n\n\n<li>Purchase price of $1.15 Billion on a cash-free debt-free basis represents an estimated EV\/Adj. EBITDA multiple of 13.5x and a multiple of 10x after factoring in only cost synergies<\/li>\n\n\n\n<li>Transaction accretive to Adj. Earnings per Share (exclusive of purchase accounting) by the second quarter after close<\/li>\n\n\n\n<li>Post-transaction net-debt leverage of approximately 3.5x Adj. EBITDA expected to be rapidly reduced within 12 to 18 months through strong pro-forma free cash flow generation<\/li>\n<\/ul>\n\n\n\n<p>SEE (NYSE: SEE) today announced that it has signed a definitive agreement to acquire Liquibox, a pioneer, innovator and manufacturer of Bag-in-Box sustainable Fluids &amp; Liquids packaging and dispensing solutions for fresh food, beverage, consumer goods and industrial end-markets.<\/p>\n\n\n\n<p>This acquisition is highly complementary to Cryovac Fluids &amp; Liquids business, the fastest growing area for SEE. Fluids &amp; Liquids flexible packaging solutions are a $7 Billion addressable potential revenue opportunity with an attractive projected annual growth rate of approximately 6%.<\/p>\n\n\n\n<p>\u201cThis is an exciting day for SEE. Liquibox is a highly strategic acquisition to fuel growth and earnings power in our SEE Operating Engine.\u201d Said Ted Doheny, SEE President and CEO. \u201cWe look forward to welcoming Liquibox\u2019s talented team. Both of our cultures strive for world-class performance and place strong emphasis on talent, sustainability, innovation and operational excellence.\u201d<\/p>\n\n\n\n<p>Founded in 1961, Liquibox is headquartered in Richmond, Va., employs more than 1,300 people and operates across 18 locations globally. The company estimates 2022 full year revenue of $362M. Its Bag-in-Box business is comprised of fountain beverage syrup, milkshake mix, dairy, coffee, water, wine, liquid foods and industrial applications. The company recently launched the award-winning Bag-in-Box Liquipure\u00ae that is recycle-ready and aims to replace metallic laminated bags, and Liquibox Orbiter\u00ae, a fully automatic, six-head rotary filler that increases productivity for high volume operations.<\/p>\n\n\n\n<p>\u201cWe look forward to partnering closely with the team at SEE. This will be a new chapter for Liquibox \u2013 a chance to accelerate innovation and bring sustainable packaging solutions to more customers and geographies,\u201d said Ken Swanson Liquibox President and Chief Executive Officer.<\/p>\n\n\n\n<p>\u201cThis move broadens the breadth of Cryovac solutions, making our portfolio stronger and more resilient as SEE navigates recessionary environments,\u201d continued Doheny. \u201cWe will generate strong synergies and accelerate innovation by combining Cryovac\u2019s barrier bags and films and technology for fresh foods with Liquibox Bag-in-Box dispensing capabilities, unleashing significant value creation to our customers and shareholders.\u201d<\/p>\n\n\n\n<p><strong>Strategic Rationale<br><\/strong><em>Broadens Cryovac Food Packaging Leadership with Highly Complementary Solutions<\/em><\/p>\n\n\n\n<p>Bag-in-Box is the most efficient and sustainable way to package and dispense fluids &amp; liquids. This packaging format is increasing penetration even in mature industries for its sustainability profile and shelf-life benefits. Tailwinds from sustainability and e-commerce secular shifts are accelerating the conversion from rigid containers to flexibles. In past economic downturns, the category has been more resilient than others, outperforming GDP. Liquibox has an established position in solutions for wine, dairy, coffee and other beverages. SEE plans to complement its core competencies in barrier bag manufacturing, film extrusion, automation and digital technology together with Liquibox Bag-in-Box and fitments to drive accelerated combined growth.<\/p>\n\n\n\n<p><em>Attractive Growth Profile, Drives Cost Synergies<\/em><\/p>\n\n\n\n<p>Liquibox has a strong financial profile and track record of growth and expects 2022 full year revenue and Adj. EBITDA of $362M and $85M respectively. SEE Operational Excellence in its integrated value chain for flexible packaging materials will provide significant productivity and efficiencies to achieve $30M in annualized estimated cost synergy savings by the end of year three (3). This transaction is a new opportunity to leverage SEE\u2019s proprietary M&amp;A playbook to drive acquisitions to successful outcomes, as demonstrated with the recent case of Automated Packaging Systems.<\/p>\n\n\n\n<p><em>Drives Rapid Geographic Expansion, Automation, and Innovation<\/em><\/p>\n\n\n\n<p>Liquibox will benefit from SEE\u2019s geographical reach to drive synergistic growth opportunities. Liquibox filler equipment technology provides an attractive source of growth for SEE AutomationTM. E-commerce ready solutions for fluids &amp; liquids will benefit from SEE\u2019s integrated approach to digital and the advancement of prismiq\u2122 digital packaging and printing solutions.<\/p>\n\n\n\n<p>Liquibox\u2019s newest innovation, Liquipure\u00ae is growing at attractive rates. In 2021, Liquibox launched VINIflow\u00ae Bag-in-Box dispensing tap with 26% less plastic to meet sustainability goals and keep products fresh longer. Liquibox solutions and patented technologies are aligned with SEE\u2019s net positive circular ecosystem strategy.<\/p>\n\n\n\n<p><em>Increases Exposure to Quick Service Restaurants and Other Attractive End Markets<\/em><\/p>\n\n\n\n<p>With the acquisition, SEE plans to increase penetration in Food Service and Quick Service Restaurants, where the combined solutions offering will include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Cryovac AutopouchTM vertical form fill seal and Flex PrepTM automation solutions for back-of-house productivity on condiment and sauces<\/li>\n\n\n\n<li>Liquibox Bag-in-Box solutions for soda fountains, dairy, urn liners, and to-go liquid box packaging.<\/li>\n<\/ul>\n\n\n\n<p><strong>Transaction Details, Financing and Approvals<\/strong><\/p>\n\n\n\n<p>Purchase price of $1.15B on a cash-free debt-free basis represents an estimated EV\/Adj. EBITDA multiple of 13.5x and a multiple of 10x after factoring in only cost synergies. SEE Adj. EPS, exclusive of purchase accounting, will be accretive immediately after close.<\/p>\n\n\n\n<p>SEE has secured $1.0B of committed debt financing with the balance of the consideration to be paid with cash on hand. As of September 30, 2022, SEE had $1.4B of liquidity consisting of $1.1B available under our committed credit facilities and $249M in cash.<br><br>Post-transaction expected net-debt leverage of approximately 3.5x Adj. EBITDA expected to be significantly reduced within 12 to 18 months, benefiting from strong pro-forma free cash flow generation. SEE anticipates corporate family ratings to remain unchanged by Moody\u2019s and S&amp;P.<\/p>\n\n\n\n<p>Subject to the receipt of applicable regulatory approvals and other customary closing conditions, the transaction is currently expected to be completed in the first quarter of 2023,. The Company plans to provide its 2023 full year outlook on February 16, 2023, inclusive of the acquisition of Liquibox, subject to the closing.<\/p>\n\n\n\n<p><strong>Advisors<\/strong><\/p>\n\n\n\n<p>Goldman Sachs &amp; Co. LLC is serving as sole financial advisor and Wachtell, Lipton, Rosen &amp; Katz is serving as legal advisor to SEE. KPMG advised on Financial, Tax, HR, and IT due diligence.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>SEE (NYSE: SEE) today announced that it has signed a definitive agreement to acquire Liquibox, a pioneer, innovator and manufacturer of Bag-in-Box sustainable Fluids &amp; Liquids packaging and dispensing solutions for fresh food, beverage, consumer goods and industrial end-markets. This acquisition is highly complementary to Cryovac Fluids &amp; Liquids business, the fastest growing area for<\/p>\n","protected":false},"author":1,"featured_media":6877,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[98,64],"tags":[453,365],"class_list":{"0":"post-6872","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business-finance","8":"category-latest-news","9":"tag-liquibox","10":"tag-sealed-air"},"_links":{"self":[{"href":"https:\/\/cpmirror.com\/index.php\/wp-json\/wp\/v2\/posts\/6872","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cpmirror.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cpmirror.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cpmirror.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/cpmirror.com\/index.php\/wp-json\/wp\/v2\/comments?post=6872"}],"version-history":[{"count":3,"href":"https:\/\/cpmirror.com\/index.php\/wp-json\/wp\/v2\/posts\/6872\/revisions"}],"predecessor-version":[{"id":6975,"href":"https:\/\/cpmirror.com\/index.php\/wp-json\/wp\/v2\/posts\/6872\/revisions\/6975"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cpmirror.com\/index.php\/wp-json\/wp\/v2\/media\/6877"}],"wp:attachment":[{"href":"https:\/\/cpmirror.com\/index.php\/wp-json\/wp\/v2\/media?parent=6872"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cpmirror.com\/index.php\/wp-json\/wp\/v2\/categories?post=6872"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cpmirror.com\/index.php\/wp-json\/wp\/v2\/tags?post=6872"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}