Packaging Update: Fourth Quarter 2013
Deloitte Corporate Finance LLC
This quarter’s Packaging Update, produced by Deloitte Corporate Finance LLC (DCF), summarizes recent transactions within this industry along with information on active buyers, current transaction valuation multiples and an overview of the public market’s perception of the industry.
Rollup acquisitions continue for plastic thermoformers.
- Rollup acquisition momentum continues as financing terms remain attractive. Some examples of recent acquisitions include:
Olympus Partners’ expansion of its thermoforming business, WNA, which it first acquired in 2012, through the acquisition of Par-Pak and Berry’s kits and catering operations, which were both completed in 2013.
Mid Oaks’ acquisition of Clear Lam Packaging’s thermoforming operations, which marked the sixth add-on acquisition of its thermoforming platform since its original investment in D&W Fine Pack in 2004.
Dart Container Co.’s acquisition of Solo Cup in March, 2012.
Valuations continue to experience upward momentum due to the improving economic outlook.
- Paper, plastic, and packaging companies exhibited the highest valuations in three years, evidenced by the DCF Packaging Index generating a 32% average return for investors versus a 27% return for the Dow Jones Industrial Average in 2013.
- EBITDA trading multiples for the DCF Packaging Index jumped 26% to 9.5x in 2013, driven in part by the paper and paperboard segment, which registered a 41% increase in valuation.
- Valuations for M&A transactions have also steadily increased throughout 2013 to an average value of 8.5x EBTIDA in 2013 compared to just 6.6x in 2012 due to a strong buyer demand for quality businesses.
To read more, download the Packaging Update.