Private equity capital makes mergers and acquisitions of packaging companies worldwide

Aug. 19, 2022

    According to people familiar with the matter, Bain, a private equity firm from the United States, plans to strengthen its packaging business, so it is in acquisition talks with Parksons Packaging Co., Ltd., headquartered in Dammam, India, for a price of 30 billion Indian rupees (about 2.65 billion yuan).As India's largest independent folding color box manufacturer, Parksons also produces paper labels, leaflets and corrugated boxes in addition to its main product folding color boxes. In 2015, Cadara Capital bought a significant minority stake in the company worth Rs 2 billion.

    "Parkson has been steadily expanding its business over the past three years, and the new crown epidemic has driven the industry's demand for packaging. Discussions are underway for a full sale of Parkson. Cadara Capital will also exit." The above-mentioned people said that Parkson has appointed Credit Suisse was the investment banker for the deal, which is likely to close within the next three months.

    "The containment of the new crown epidemic has forced customers to order household goods and necessities online. This is why global investors are looking to seize investment opportunities in the packaging space, even if the valuation brings a premium." Parksons' main customers include Coca-Cola, McDonald's, KFC and Hindustan Unilever, in addition to several popular food, beverage, home and personal care and healthcare brands. This follows Bain's March 2018 announcement of the acquisition of World Wide Packaging, a leading U.S. provider of cosmetic packaging components, plastic tubes, and formulation and filling technologies.

    Parksons is one of the largest packaging solutions providers in India. Led by chairman Ramesh Kejriwal, the company is headquartered in Mumbai and has five ultra-modern production plants across India. All Parksons factories focus on the production of folding color boxes and assign the corresponding jobs to a total of 22 offset printing lines, 13 of which are from KBA, and one digital printing line from HP. However, there are differences between individual factories and their specialties. Both digital and screen printing are based in Dammam and produce pharmaceutical packaging. Pantnagar specialises in packaging with high quality cold stamping process. Chakan manufactures beverage cartons and other production plants are located in Sricity and Guwahati.

    A nationwide base enables Parksons to offer a wide range of packaging products to customers across the country. Domestic production, complemented by global export operations. The product portfolio includes: single-layer color boxes, offset lamination, shipping and retail packaging, shelf packaging, promotional and gift packaging, various custom packaging, beverage color boxes and more. In 2019, Parksons had a turnover of around 150 million euros, produced almost 18,000 different items and processed 100,000 tons of paper and board annually. More than 1,700 employees work in the factory with a total production area of nearly 100,000 square meters.

    Fiber-based packaging specialist Heathpak has been acquired by Solidus Solutions in early February as the company looks to strategically expand its business and expand its product portfolio. Headquartered in Newport, Wales, Heatpak averages around 16,000 tonnes of corrugated boxes per year, mainly for the meat, fish, poultry and horticulture sectors. It operates both offset and digital facilities, which will bring important print and post-press functions to Netherlands-based Solidus' UK operations in Corby and Skipton.

    The company, which employs around 60 people, had a turnover of £14.8 million in the year ended 31 May 2020, up from £14.3 million in 2019. Solidus said the acquisition was completed on Monday, February 1. The company acquired Heathpak from its two owners, Lyndon Whitlock and Alan Heath.

    Solidus, which provides corrugated packaging in several countries and regions around the world, was previously SKG's operating bases in the Netherlands, Belgium and the United Kingdom. It was renamed Solidus Solutions after it was acquired by pan-European mid-market investor Aurelius in April 2015. It is now owned by Centerbridge Partners, which acquired the company from Aurelius in September 2019.

    Also in the UK, in order to further consolidate its position in the UK packaging market, AR Packaging Group from Sweden announced the acquisition of Firstan Holdings, a well-known folding color box manufacturer in the UK. With this acquisition, AR Packaging Group will also further strengthen its local production of folding cartons, thereby expanding its reach to UK food and healthcare customers. This strategic move has made the group a multi-species supplier of folding cartons, flexible packaging and containerboard in the UK. The deal for the 140-employee, family-run pharmaceutical and food packaging specialist closed on Jan. 15, but terms of the acquisition were not disclosed.

    AR Packaging Group, which is also actually a private equity firm, has sales of more than €900m (£801m). It operates 30 factories in 13 countries, mostly in Europe, and also has sizable operations in Indonesia, Nigeria and Russia.

    The strategic direction of AR packaging development in specific market segments and regions continues to be successful. The group already has a strong market position as specialists in flexible barrier materials and carton packaging for the UK market. The acquisition of Firstan has now added a folding carton production segment, resulting in a broader offering of packaging solutions across multiple categories, primarily for food and healthcare customers. Acquired by CVC Capital Partners in 2016, AR Packaging Group has nearly doubled its footprint and operating income over the past five years, with products including folding cartons, trays, cups, flexible materials, system solutions, flyers and labels .

    Montreal-based SPG founder Paul Golin recently announced that private equity firm Altamont Capital Partners has acquired the company, which will lead to new jobs, especially in Quebec. Headquartered in Pointe-Claire, SPG is an integrated provider of protective packaging products, operating two divisions, IVEX and Engineered Packaging, with 16 facilities in the United States, Canada and Mexico. Founded 40 years ago by Paul Golin, SPG has grown steadily over the years and has become a leader in the North American specialty packaging industry. ACP is a Palo Alto, California-based private investment firm with more than $2.5 billion in assets under management focused on investments in middle market businesses.

    In December last year, Lenovo, also a global private equity firm, OpenGate Capital, announced that the company had signed an agreement to acquire its digital cutting system manufacturer, Kongsberg Precision Cutting Systems, from Esko. OpenGate Capital is a global private equity firm specializing in the acquisition and operation of businesses to create new value through operational improvement, innovation and growth. Founded in 2005, OpenGate Capital is headquartered in Los Angeles, California, with a European office in Paris, France. Through its traditional and fund investments, OpenGate Capital has executed more than 30 acquisitions to date, including corporate divestitures, management buyouts, special cases, and transactions with private sellers in North America and Europe.

    Kongsberg is one of the most advanced manufacturers of digital cutting equipment in the world, and its products include high-speed digital cutting tables, as well as related consumables and services. Kongsberg was established in Norway in 1965, when Barco, the predecessor of Esko at the time, acquired the company in 1998. The entire planned sale now includes the original R&D facility in Kongsberg, Norway, and a production facility in Brno, Czech Republic. OpenGate Capital saw an opportunity to grow its business (Conspor PCS) outside of packaging applications, expanding the product range, as well as the tooling and consumables range.

    In fact, rising demand for packaging for household, medical, edible and lifestyle products is a major reason why private equity firms are considering deepening their foothold in the packaging industry, especially in emerging economies such as India and China. Parksons, one of the largest manufacturers of folding color boxes in India, was acquired by capital. Should Chinese packaging and printing companies prepare for the baptism of capital?