Top News in PLASTICS AND PACKAGING
M&A Quarterly
For additional information or inquiries, please contact one of our team members:
www.pmcf.com
PLASTICS & PACKAGING THIRD QUARTER 2015
John D. Hart 248.223.3468 [email protected]
Matt G. Jamison 248.223.3368 [email protected]
Ryan R. Shuchman 248.603.5372 [email protected]
Erik K. Wittbold 248.603.5397 [email protected]
About PMCF
P&M Corporate Finance (“PMCF”) is an investment banking firm, focused exclusively on middle market transactions, with professionals in Chicago, Detroit, and across the globe through Corporate Finance International associates. Our dedicated Plastics and Packaging Group has deep industry knowledge and covers a wide range of processes including thermoforming, sheet and film extrusion, blow molding, injection molding, and resin and color compounding. Offering a breadth of advisory services, the Plastics and Packaging Group has helped clients worldwide meet their sale, acquisition, financing, and strategic growth objectives.
Investment Banking Services:
• Mergers & Acquisitions
• Sales & Divestitures
• Capital Raising
• Sale Planning
CHICAGO225 W. Washington Street, Suite 2700Chicago, IL 60606312.602.3600
DETROITTwo Towne Square, Suite 425Southfield, MI 48076248.603.5300
PMCF Transaction Announcements
Packaging: Specialty FoodBlow Molding & Decoration
Company Sale toStrategic Buyer
Packaging: BeverageInjection Molded Preforms
Strategic Acquisition Advisory
Engineered ComponentsInjection Molding and Extrusion
Company Merger withStrategic Partner
pmcf.com
M&A Quarterly – Plastics & Packaging
2
2015 plastics and packaging M&A volume reflected a flat, and slightly downward trend, in the second quarter of the year. However, the market may have simply been pausing for a breath as M&A deal count through the third quarter is now up signifi-cantly over 2014 levels. Plastics and packaging transactions totaled 251 through the third quarter in 2015 versus a total of 240 for the same period last year.
Driving this increase was strong buying activity from private equity platform investors driven in part by continued access to low cost debt. These buyers have been nearly 70% more active year to date in the plastics and packaging sector as compared to last year. Foreign financial buyers have also been increasingly active within plastics and packaging, completing 77% more deals through the third quarter of 2015 versus the same period in 2014.
Key Q3 2015 plastics and packaging M&A trends included the following:
• Aggressive private equity activity has pushed strategic buyers to their lowest overall percentage of transaction activity in several years at 58%
• Most plastic segments grew in terms of deal count year over year with the exception of resin and compounding. This likely does not reflect buyer interest, which remains strong, and is more attributable to timing of deal closings in our opinion
• Packaging deals are up 33 transactions through the third quarter of 2015 and have already exceeded 2014’s four quarter total. The largest M&A growth sector in plastic packaging was rigid converters followed by flexible converters
• Publicly traded plastic businesses who were outperforming the S&P 500 at the end of the second quarter this year are now trading at parity at the end of the third quarter
Key transactions for the quarter included the following:
• Gerresheimer AG’s (DB:GXI) acquisition of Centor, from Montagu private equity, for $725 million or 9.8x EBITDA
• Berry Plastics Group, Inc.’s (NYSE:BERY) acquisition of AVINTIV from The Blackstone Group for approximately $2.5 billion
• Jarden Corporation’s (NYSE:JAH) acquisition of The Waddington Group from private equity firm Olympus Partners for $1.35 billion
• Solvay SA’s (ENXTBR:SOLB) acquisition of competitor Cytec Industries (NYSE:CYT) for approximately $6.4 billion
• Ireland–based injection molder One51 plc’s acquisition of IPL Inc., from Novacap private equity, for approximately $220 million
Year to date activity clearly reflects a continuation of a strong M&A environment in plas-tics and packaging and what is generally agreed to be a “seller’s market.” We’ve received numerous inquiries as to whether the M&A market has peaked and when we believe it will start to decline. PMCF’s current view is that plastics and packaging M&A should continue to be strong in 2016 given the strategic and private equity buyer dynamics, low cost and availability of debt, and the generally positive economic outlook. Beyond 2016 however, we are more cautious given the cyclical nature of M&A and the fact we will be in our 7th year of a strong M&A market cycle.
Strategic Financial Add-On Financial Platform
220
55
72
347
235
68
79
382
213
56
59
328
162
37
41
240
266
60
67
393
0
50
100
150
200
250
300
400
450
350
20142010 Q3 YTD ‘142011 2012 2013
Num
ber
of D
eals
233
49
59
341
146
43
62
251
Q3 YTD ‘15
Q3 2015 Market Summary & Outlook
Q3 YTD 2015
Q3 YTD 2014
Flexible
Rigid Packaging
9%
Industrial15%
Closures 2%
Bottles 5%
Resin18%
Custom Molding30%
Building Products 6%
FlexiblePackaging
14%
Consumer 1%
Sector‘14 – ’15
Change
Injection Molding
Blow Molding
Film
Resin/Color & Compounding
Sheet & Thermoforming
Specialty
Total
201322
86
60
68
38
54
328
22
95
63
72
23
66
341
17
72
42
51
16
42
240
7%
30%
18%
21%
7%
18%
100%
19
77
49
41
20
45
251
8%
31%
20%
16%
8%
18%
100%
% of Total
% of Total2014
% Change
Q3 YTD‘15
Q3 YTD‘14
2
5
7
-10
4
3
11
12%
7%
17%
-20%
25%
7%
5%Source: P&M Corporate Finance, Company Reports
Flexible
Rigid Packaging
17%
Industrial16%
Consumer3%
Bottles 4%
Resin15%
BuildingProducts
6%
FlexiblePackaging
15%
Custom Molding20%
Closures4%
Transactions by Product Segment
M&A Quarterly – Plastics & Packaging
PMCF
3
Global Plastic Packaging M&A
Trends in M&A:
• Plastic packaging related M&A experienced strong levels of transaction activity through the first three quarters of 2015, with transaction volume up by 33 deals year-over-year through Q3 YTD ‘15. Q3 packaging M&A activity doubled year-over-year
• Packaging businesses in the Food & Beverage, Consumer, and Medical end markets remain highly attractive to both financial and strategic buyers, with all three segments showing significant Q3 YTD ‘15 increases in deal volume versus the comparison period
• Rigid packaging deals accounted for the highest percentage of the overall increase in packaging transactions, with transaction mix for these deals shifting from 27% through Q3 YTD ’14 to 41% through Q3 YTD ‘15
Transactions by Buyer Type Transactions by End Market
0
20
40
60
80
100
120
140
65
53
118
Q3 YTD ‘14
66
48
114
2014
71
47
118
Q3 YTD ‘15
40
30
70
2011
56
43
2012
63
40
103
2013
Strategic Financial
Num
ber
of D
eals 99
Food and Beverage
Industrial
Consumer
Construction
Medical
Automotive
Transportation
Electronics
Total
38
16
10
-
5
1
-
-
70
57
13
23
-
10
-
-
-
103
Q3 YTD ‘15Q3 YTD ‘14
Featured Sector Transactions
July 2015 — Gerresheimer AG (DB:GXI), a global leader in pharmaceutical packaging based in Germany, has acquired Centor US Holding Inc., a former Rexam plc business. Gerresheimer paid $725 million to acquire Centor from Nemera Development which is owned by Montagu private equity. The purchase price reflects a multiple of 9.8x Centor’s LTM EBITDA. Centor’s prod-ucts include plastic vials & closures, applicators, droppers, ointment jars, and oval bottles primarily used in pharmaceutical packaging. Perrysburg, OH-based Centor is one of the leading producers of prescription plastic vials for North American market. The acquisition of Centor provides a significant platform for Gerresheimer to grow its North American operations.
July 2015 — Private equity firm Wellspring Capital Management LLC bought Ampac Holdings LLC which will merge with Pro-lamina Corp. to create a flexible packaging group called Prolampac Intermediate Corp. Ampac is based in Cincinnati and has five U.S. factories, in Cincinnati, OH; Auburn, WA; Minneapolis, MN; and Cary and Hanover Park, IL. According to Plastics News’ most recent ranking, Ampac generated estimated film packaging sales of $154 million. Westfield, MA-based Prolamina generated an estimated $300 million in sales from three factories, in Westfield and Neenah, WI; and Terrebonne, Quebec.
Flexible
Public Acquirer
26%
PrivateAcquirer
32%
PE to PE13%
Private Equity(PE)29%
RigidFlexibleBottlingCaps & Closures
Total
19 33 11 7 70
27% 47% 16% 10% 100%
# % Packaging # % Packaging 42 39 11 11 103
41% 37% 11% 11% 100%
Q3 YTD ‘15Q3 YTD ‘14
Q3 YTD ‘14 Q3 YTD ‘15
Buyer Type
Packaging Transaction Detail
Sources: P&M Corporate Finance, Plastics News, Company Reports
PublicAcquirer
39%
Private Acquirer
20%
Private Equity(PE)35%
PE to PE6%
pmcf.com
M&A Quarterly – Plastics & Packaging
4
Global Injection Molding M&A
Trends in M&A:• Transactions involving injection molders were up 7% through Q3 YTD ‘15, or five deals, versus Q3 YTD ‘14, primarily driven by
strong Q3 ’15 transaction volume in the sector
• Financial buyers accounted for 40% of injection molding transactions through Q3 YTD ‘15, representing the highest proportion of financial buyers to total sector deal volume since 2012
• Injection molding transactions involving U.S.-based buyers were flat through the third quarter of 2015, while transactions involv-ing foreign injection molders and buyers increased by 11% versus 2014 levels
Q3 YTD ‘14 Q3 YTD ‘15
Buyer Type
Public Acquirer
31%
Private Acquirer
37%
Private Equity(PE)25%
PE to PE7%
Flexible Public
Acquirer41%
Private Acquirer
16%
Private Equity(PE)34%
PE to PE9% U.S.-to-U.S.
U.S.-to-Foreign
Foreign-to-U.S.
Foreign
Total
Distressed
22
6
4
45
77
3
24
4
8
36
72
1
Q3 YTD ‘15Q3 YTD ‘14
Sector Deal Statistics
Sources: P&M Corporate Finance, Plastics News, Company Reports
Transactions by Buyer Type Transactions by End Market
0
20
40
60
80
100
120
58
52
110
Q3 YTD ‘14
67
39
106
2014
57
29
86
Q3 YTD ‘15
49
23
72
2011
68
27
95
2012
46
31
77
2013
Strategic Financial
Num
ber
of D
eals
Food and Beverage
Industrial
Consumer
Construction
Medical
Automotive
Transportation
Electronics
Total
6
17
12
-
10
21
1
5
72
11
14
13
1
16
20
1
1
77
Q3 YTD ‘15Q3 YTD ‘14
Featured Sector Transactions
September 2015 — Nypro Inc., a subsidiary of Jabil Circuit (NYSE:JBL), has acquired European injection molded packaging business Plasticos Castella SA for $100 million. Plasticos Castella, which has facilities in Spain and Hungary, is a leading Eu-ropean supplier of injection molded containers to the Food and Consumer Packaging markets. Massachusetts-based injection molder Nypro is primarily focused on the Healthcare and Consumer Packaging industries. Nypro adds significant injection molded packaging capabilities via the acquisition of Plasticos, which will also expand the company’s global footprint.
July 2015 — Dublin-based injection molder One51 plc has acquired a controlling interest in IPL Inc., from Novacap private eq-uity for approximately €200 million. IPL designs, manufactures, and markets injection molded plastic products for industrial and agri-food markets in North America. The Company specializes in thin wall plastic food containers and pails, and tamper evident containers for retail, wholesale food, bulk, restaurant and food service packaging, and other applications. One51 group CEO, Alan Walsh, has said the deal provides One51 with access to significant new markets and is a transformational deal as a strategic fit for the firm.
M&A Quarterly – Plastics & Packaging
PMCF
5
Global Film M&A
Trends in M&A:
• Transactions involving film extruders and converters increased by 7 deals through Q3 YTD ’15, with the year-over-year shift driven primarily by increasing deal volume in the Consumer and Food & Beverage end markets
• Foreign M&A transactions involving film businesses experienced a sharp increase through the first three quarters of 2015, up 8 deals, or 29% versus the comparison period
• Strategic buyers remained the most active buyers in the film segment, representing 59% of total transaction volume through Q3 YTD ’15. This percentage was slightly down from the same period last year
Q3 YTD ‘14 Q3 YTD ‘15
Buyer Type
Flexible
PrivateAcquirer
36%
Public Acquirer
26%Private Equity(PE)31%
PE to PE7%
Flexible
PrivateAcquirer
24%
Public Acquirer
35%Private Equity(PE)37%
PE to PE4% U.S.-to-U.S.
U.S.-to-Foreign
Foreign-to-U.S.
Foreign
Total
Distressed
9
2
3
28
42
2
Q3 YTD ‘14
11
2
-
36
49
-
Q3 YTD ‘15
Sector Deal Statistics
Sources: P&M Corporate Finance, Plastics News, PE Hub, Company Reports
Transactions by Buyer Type Transactions by End Market
Food and Beverage
Industrial
Consumer
Construction
Medical
Automotive
Transportation
Electronics
Total
26
13
7
-
2
-
-
1
49
Q3 YTD ‘15
22
14
4
-
2
-
-
-
42
Q3 YTD ‘14
Featured Sector Transactions
• September 2015 — Berry Plastics Group, Inc. (NYSE:BERY) has acquired AVINTIV from The Blackstone Group for approxi-mately $2.5 billion. AVINTIV is a leading global supplier of polypropylene and polyethylene flexible nonwoven products and other specialty materials primarily used in infection prevention and personal care markets. AVINTIV employs over 4,500 people and has 23 locations in 14 countries. Berry Plastics, which generated annual sales of roughly $5 billion in 2014, adds a number of new technologies and products to its diversified plastic packaging platform with the acquisition. Roughly half of Berry’s revenue was generated through flexible packaging prior to acquiring AVINTIV.
• September 2015 — Private equity group Olympus Partners has acquired Liqui-Box Holdings Inc. from investment firm The Sterling Group. Liqui-Box, a former DuPont Co. subsidiary based in Virginia, is a leading producer of bag-in-box packaging for the dairy, beverage, food, and wine markets. Liqui-Box represents a new platform for Stamford, CT-based Olympus Partners, who has made prior investments in a number of plastics and packaging businesses including Pregis and The Waddington Group. Olympus hopes to leverage its experience and relationships in the industry to expand Liqui-Box to new customers, geographies, and products.
Strategic Financial
45
23
68
Q3 YTD ‘14
48
27
75
2014
41
19
60
Q3 YTD ‘15
26
16
42
2011
35
28
63
2012
29
20
49
2013
Num
ber
of D
eals
0
10
20
30
40
60
80
50
70
pmcf.com
M&A Quarterly – Plastics & Packaging
6
Global Resin and Color & Compounding M&A
Trends in M&A:
• Transactions involving resin suppliers and color & compounders were down 20% year-over-year through the first three quarters of 2015 versus Q3 YTD 2014 results and appear to be trending below 2014’s high point. However, our view is that this is likely a timing-based trend versus lack of buyer interest which remains robust
• Resin suppliers accounted for 66% of transaction mix in Q3 YTD 2015, a 7% increase in their proportion of total deal volume versus the comparison period
• The declining number of domestic transactions involving the sale of U.S. resin suppliers and color & compounders was a signifi-cant driver of the overall decrease in deal volume, falling by 10 deals in Q3 YTD 2015 compared to Q3 YTD 2014 levels
Q3 YTD ‘14 Q3 YTD ‘15
Buyer Type
Flexible
PrivateAcquirer
25%
Public Acquirer
43%
Private Equity(PE)25%
PE to PE6%
Flexible
PrivateAcquirer
16%
Public Acquirer
45%
Private Equity(PE)30%
PE to PE9% U.S.-to-U.S.
U.S.-to-Foreign
Foreign-to-U.S.
Foreign
Total
Distressed
8
2
5
26
41
-
Q3 YTD ‘15
18
5
2
26
51
2
Q3 YTD ‘14
Sector Deal Statistics
Sources: P&M Corporate Finance, Plastics News, Company Reports
Transactions by Buyer Type
Featured Sector Transactions
• July 2015 — Belgian chemical company Solvay SA (ENXTBR:SOLB) has acquired American competitor Cytec Industries (NYSE:CYT) for approximately $5.5 billion in cash. Solvay paid $75.25 a share for Cytec, which represents a 29% premium to the company’s July 28th closing price. The deal values Cytec at $6.4 billion including debt. New Jersey-based Cytec produces a variety of specialty chemicals and resin systems primarily for aerospace and industrial applications. The company has 49 locations globally and employs more than 4,500 people. Solvay, which is based in Belgium, is a leading global supplier of spe-cialty chemicals and materials to the aerospace, automotive, and electronics industries.
• July 2015 — Germany-based Domo Chemicals has acquired American compounder Technical Polymers LLC. Buford, GA-based Technical Polymers develops and manufactures high-performance engineering polymers and specialized elastomers. The company has annual sales of approximately $35 million, with 60 to 70 percent of annual sales to major U.S. automakers according to Technical Polymers CEO Ron Kay. The acquisition will provide Domo with a platform for footprint expansion in the U.S., specifically in the U.S. southeast to support the growing number of German automotive OEM’s in the region.
0
10
20
30
40
60
80
50
70
42
14
56
44
18
62
52
16
68
35
16
51
53
19
72
25
41
Strategic Financial2014 Q3 YTD ‘14 Q3 YTD ‘152011 2012 2013
16
Num
ber
of D
eals
Sector DetailQ3 YTD ‘14
Sector DetailQ3 YTD ‘15
Flexible
Color &Compounding
41%
Resin Supplier59%
Flexible
Color &Compounding
34%
Resin Supplier66%
M&A Quarterly – Plastics & Packaging
PMCF
7
Global Sheet and Thermoforming M&A
Trends in M&A:
• Sheet and thermoforming transactions were up by 4 deals through Q3 YTD ‘15, an increase of 25% compared to Q3 YTD ‘14 levels, as deal volumes trend toward a potentially higher level than 2014
• Transaction mix was heavily weighted toward Food & Beverage deals through Q3 YTD 2015, accounting for 60% of total deals versus 25% through three quarters in 2014
• Foreign sheet and thermoforming deals represented 75% of total transaction volume in Q3 YTD 2015, reflecting the high levels of consolidation within the US market which has limited available acquisition targets
Q3 YTD ‘14 Q3 YTD ‘15
Buyer Type
Flexible
Private Equity(PE)44%
Private Acquirer
31%
Public Acquirer
25%Flexible Private Equity
(PE)30%
PE to PE5%
Public Acquirer
45%
Private Acquirer
20%
U.S.-to-U.S.
U.S.-to-Foreign
Foreign-to-U.S.
Foreign
Total
Distressed
3
2
1
14
20
-
Q3 YTD ‘15
6
-
2
8
16
1
Q3 YTD ‘14
Sector Deal Statistics
Sources: P&M Corporate Finance, Plastics News, Company Reports
Transactions by Buyer Type Transactions by End Market
Food and Beverage
Industrial
Consumer
Construction
Medical
Automotive
Transportation
Electronics
Total
12
4
1
-
-
1
2
-
20
Q3 YTD ‘15
4
7
2
-
1
-
2
-
16
Q3 YTD ‘14
Featured Sector Transactions
• July 2015 — Global consumer products conglomerate Jarden Corporation (NYSE:JAH) has acquired The Waddington Group from private equity firm Olympus Partners for $1.35 billion. Waddington, which has annual sales of approximately $800 mil-lion, is a leading supplier of food-service products. Waddington employs 2,900 people across 17 manufacturing facilities in Europe and North America. The acquisition significantly expands Jarden Corp’s thermoforming capabilities and also adds additional injection molding technology. Jarden Corp also adds well known brand names such as WNA, Polar Pak, Par-Pak, Waddington, and Eco Products to its existing portfolio of over 120 brands.
• August 2015 — Swiss packaging group Stäger & Co. has acquired Czech Republic-based thermoformer Innovac s.r.o. Innovac produces packaging solutions that include component carriers, blisters, and trays for the automotive, electronics, and con-sumer goods industries. Stäger & Co. manufacturers a variety of transparent packaging products and has production facili-ties in the United Kingdom, Czech Republic, and Switzerland. Stäger will relocate Innovac’s production and management team to a modern production facility to allow for expansion and the installation of additional equipment.
0
5
10
15
20
25
30
35
40
22
16
38
9
7
16
13
7
20
21
11
32
20
12
32
Num
ber
of D
eals
Strategic Financial2014 Q3 YTD ‘14 Q3 YTD ‘152011 2012 2013
15
8
23
pmcf.com
M&A Quarterly – Plastics & Packaging
8
Global Blow Molding M&A
Trends in M&A:
• Transaction volume among blow molders remained relatively flat through the first three quarters of 2015, up by 2 deals versus the same period in 2014
• Publicly traded buyers accounted for 42% of blow molding transactions through Q3 YTD 2015, increasing their proportion of total deal volume by 7%, while privately held and financial buyers both experienced a drop in their proportion of deals compared with Q3 YTD 2014 levels
• Transactions involving industrial blow molders were up 50% through Q3 YTD 2015 versus Q3 YTD 2014, recording the highest proportion of end market transaction mix during the period
Q3 YTD ‘14 Q3 YTD ‘15
Buyer Type
Flexible
Private Equity(PE)24%
Private Acquirer
24%
Public Acquirer
35%PE to PE
17%Flexible
Private Equity(PE)32%
Private Acquirer
21%
Public Acquirer
42%PE to PE
5%
U.S.-to-U.S.
U.S.-to-Foreign
Foreign-to-U.S.
Foreign
Total
Distressed
3
-
1
15
19
2
Q3 YTD ‘15
6
-
1
10
17
4
Q3 YTD ‘14
Sector Deal Statistics
Transactions by Buyer Type Transactions by End Market
Food and Beverage
Industrial
Consumer
Construction
Medical
Automotive
Transportation
Electronics
Total
8
4
3
-
-
2
-
-
17
Q3 YTD ‘14
5
6
6
-
1
1
-
-
19
Q3 YTD ‘15
Featured Sector Transactions
• August 2015 — Eastern Trading Co Ltd., parent company of All Joy Foods, has acquired South African blow molder Winplas Packaging Limited. Winplas, who operates manufacturing facilities in Cape Town and Johannesburg, produces PET bottles and jars for the food and beverage markets. Eastern Trading Co, which is also based in South Africa, operates a number of food processing businesses. The acquisition of Winplas provides vertical integration into PET plastic packaging, which will support expansion into long shelf life food and beverage products.
• July 2015 — Hong Leong Asia Ltd. (SGX:H22) has acquired the remaining 75% equity stake in blow molded packaging joint venture Tianjin Rex Packaging Co. through its subsidiary Rex Holdings. China-based Tianjin Rex Packaging manufactures a range of blow molded packaging products including bottles, drums, pails, and other industrial containers. Hong Leong Asia is a diversified industrial manufacturing conglomerate that currently operates four plastic packaging facilities in China and Malaysia. The acquisition of Tianjin Rex Packaging will add a wholly owned 300,000 foot manufacturing facility to Hong Le-ong’s existing industrial packaging platform.
0
5
10
15
20
25
30
35
11
11
22
10
7
17
13
6
19
10
8
18
15
15
30
Num
ber
of D
eals
Strategic Financial2014 Q3 YTD ‘14 Q3 YTD ‘152011 2012 2013
12
10
22
Sources: P&M Corporate Finance, Plastics News, Company Reports
M&A Quarterly – Plastics & Packaging
PMCF
9
Additional Global Specialty Sector Activity
Trends in M&A:
• Q3 YTD ‘15 transactions involving specialty plastic process types, including rotational molding, foam, pipe & tube, profile extrusion, and composites, experienced a slight increase in deal volume, up by 7% compared to Q3 YTD ‘14
• Mix between financial and strategic buyers shifted in Q3 YTD ’15 as M&A activity among financial buyers rose significantly, accounting for 42% of specialty M&A volume versus 21% through the same period in 2014
• Trends experienced during the first half continued through the third quarter of 2015 as industrial activity increased while construction related specialty deals leveled off
FEATURED SECTOR TRANSACTIONS
Pipe & Tube
August 2015 — Denmark-based Micro Matic A/S, a subsidiary of Nielsen & Nielsen Holding, has acquired Valpar Industrial Ltd. from the O’Neill Group. Valpar, which is headquartered in Northern Ireland, is one of the world’s largest manufacturers of beverage tubes and dispensing “pythons” for the beverage industry. The company produces a number of specialty tubing products for the beverage, automotive, and industrial industries. Micro Matic, a diversified supplier of dispensing equipment and components, will add significant extruding capabilities and tubing products to its portfolio via the acquisition.
Specialty Converting
August 2015 — Plastic box converters Printex Packaging Inc. and Transparent Packaging have merged to create a leading regional supplier of specialty packaging. The combined entity will operate as Printex Transparent Packaging, Inc. and have manufacturing facilities located in St. Laurent, Quebec and Islandia, New York. The company’s primary products, transpar-ent plastic boxes, offer a stylish alternative to paper folding carton and corrugated packaging options. These products are typically converted from PET sheet and utilized in consumer packaging applications.
Engineered Foam
September 2015 — Unique Fabricating, Inc. (NYSE MKT:UFAB) has acquired Michigan-based Great Lakes Foam Tech-nologies, Inc. Great Lakes produces a range of molded polyurethane components for the Automotive, ORV, and Industrial Equipment industries. Unique Fabricating, which is also headquartered in Michigan, engineers and manufactures foam, rubber, and plastic components utilized in noise, vibration and harshness management applications primarily for the Automotive market. Unique Fabricating paid $12 million in cash at closing, representing a 6.0x multiple of Great Lake’s 2014 EBITDA of $2 million.
Source: P&M Corporate Finance, Plastics News, Company Reports
Transactions by Buyer Type Transactions by End Market
Food and Beverage
Industrial
Consumer
Construction
Medical
Automotive
Transportation
Electronics
Total
1
14
4
17
2
1
3
-
42
Q3 YTD ‘14
4
20
4
13
-
2
2
-
45
Q3 YTD ‘15
0
10
20
30
40
50
60
70
90
80
28
32
60 27
53
80
30
24
54
50
16
66
33
9
42
26
19
45
Num
ber
of D
eals
Q3 YTD ‘142014 Q3 YTD ‘152011 2012 2013Strategic Financial
pmcf.com
M&A Quarterly – Plastics & Packaging
10
PMCF Plastics & Packaging Index S&P 500 Index
Sep - ‘13 Dec - ‘13 Mar - ‘14 Jun - ‘14 Sep - ‘14 Dec - ‘14 Mar - ‘15 Jun - ‘15 Sept - ‘1590%
110%
130%
150%
170%
100%
120%
140%
160%
Note: Chart highlights relative stock price return
PMCF Plastics & Packaging Index
PMCF Plastics & Packaging Index Valuation
• Despite a first half in which plastics companies tracked in the PMCF Plastics & Packaging Index outperformed the S&P 500, the PMCF Plastics and Packaging Index was approximately equal to the S&P 500 at the closing of Q3 2015
• Stock market valuations were down slightly in Q3 ’15 as average EBITDA multiples eased off following a valuation high point for publicly traded plastics businesses in Q2 ’15
Revenue MultipleAverageMedian
EBITDA MultipleAverageMedian
1.4x1.3x
12.1x10.5x
Q3 ‘15
1.2x1.1x
9.4x8.8x
1.4x1.3x
11.8x9.9x
Q3 ‘13
1.2x1.1x
9.5x8.8x
Q4 ‘13
1.2x1.1x
9.5x8.8x
Q1 ‘14 Q2 ‘14
1.2x1.2x
9.4x9.3x
1.2x1.2x
9.4x9.3x
Q3 ‘14
1.2x1.1x
9.3x9.0x
Q4 ‘14
1.4x1.3x
10.8x10.5x
Q1 ‘15 Q2 ‘15
Private Equity InvestmentsDollars in Billions
No. of Deals Disclosed Deal Value
Num
ber
of D
eals
0
Dea
l Val
ue ($
in B
illio
ns)
$0$50$100$150$200$250$300$350$400$450$500
2,000 4,000 6,000 8,000
10,000 12,000 14,000 16,000 18,00020,000
2008
18,784
2009
11,531
2010
10,342
2011
14,315
2012
16,126
2013
18,133
2014
16,542
Q3 ‘14 Q3 ‘15
13,931 14,275
Deal Volume Capital Invested
Num
ber
of D
eals
$00
Dea
l Val
ue ($
in B
illio
ns)
2008 2009
3,572
2010
2,382
2012
1,605
2014
2,408
Q3 ‘14
2,686
Q3 ‘15
3,120 3,063
$200
$400
$600
$800
$1,000
$1,200
$1,400
500
1,000
1,500
2,000
2,500
3,000
4,000
3,500
2,660
2,287
2011 2013
• Deal volume in the U.S. middle market was relatively flat through Q3 YTD ’15, compared to Q3 YTD ’14, with total deal value and transaction volume both up slightly
• Overall, U.S. private equity activity declined in terms of both deal volume and capital invested, despite high levels of uninvested capital, as the supply of quality acquisition targets has dwindled after years of sustained activity
U.S. M&A Activity — Deals < $500M
U.S. Middle Market Transaction Summary (All Industries)
Source: Capital IQ, Pitchbook, and PMCF Estimates
Note: Multiples based on most recent data available as of printingSource: Capital IQ
*Includes all disclosed transaction with at least one U.S. party
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2013 IndustrialManufacturing/Distribu tion
Deal of the Year
