Charlotte, N.C., United States:
- Combination of Cryovac and Liquibox to speed up the expansion of sustainable packaging options for the $3 Trillion Fluids & Liquids {industry}
- Highly strategic transaction powers SEE’s imaginative and prescient to change into a world-class, digitally-driven firm automating sustainable packaging options
- Liquibox is a worldwide chief in Bag-in-Box options and engineered fitments and dispensers
- Liquibox estimated full 12 months 2022 income and Adj. EBITDA of $362M and $85M, respectively
- Anticipated value synergies of $30M yearly to be carried out earlier than the tip of 12 months three (3) post-closing
- Liquibox anticipated to develop at 6-8% CAGR, and as soon as mixed with Cryovac Fluids & Liquids business, to develop at double digit charges benefiting from the complementary options portfolio, applied sciences and operations
- Combination unites two aligned, high-performance progress and innovation cultures
- Purchase worth of $1.15 Billion on a cash-free debt-free foundation represents an estimated EV/Adj. EBITDA a number of of 13.5x and a a number of of 10x after factoring in solely value synergies
- Transaction accretive to Adj. Earnings per Share (unique of buy accounting) by the second quarter after shut
- Post-transaction net-debt leverage of roughly 3.5x Adj. EBITDA anticipated to be quickly lowered inside 12 to 18 months by way of sturdy pro-forma free money movement technology
SEE (NYSE: SEE) at present introduced that it has signed a definitive settlement to purchase Liquibox, a pioneer, innovator and producer of Bag-in-Box sustainable Fluids & Liquids packaging and shelling out options for contemporary meals, beverage, shopper items and industrial end-markets.
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(Graphic: Business Wire)
This acquisition is very complementary to Cryovac Fluids & Liquids business, the quickest rising space for SEE. Fluids & Liquids versatile packaging options are a $7 Billion addressable potential income alternative with a gorgeous projected annual progress charge of roughly 6%.
“This is an exciting day for SEE. Liquibox is a highly strategic acquisition to fuel growth and earnings power in our SEE Operating Engine,” Said Ted Doheny, SEE President and CEO. “We look forward to welcoming Liquibox’s talented team. Both of our cultures strive for world-class performance and place strong emphasis on talent, sustainability, innovation and operational excellence.”
Founded in 1961, Liquibox is headquartered in Richmond, Va., employs greater than 1,300 individuals and operates throughout 18 places globally. The firm estimates 2022 full 12 months income of $362M. Its Bag-in-Box business is comprised of fountain beverage syrup, milkshake combine, dairy, espresso, water, wine, liquid meals and industrial purposes. The firm just lately launched the award-winning Bag-in-Box Liquipure® that’s recycle-ready and goals to exchange metallic laminated baggage, and Liquibox Orbiter®, a totally computerized, six-head rotary filler that will increase productiveness for top quantity operations.
“We look forward to partnering closely with the team at SEE. This will be a new chapter for Liquibox – a chance to accelerate innovation and bring sustainable packaging solutions to more customers and geographies,” stated Ken Swanson Liquibox President and Chief Executive Officer.
“This move broadens the breadth of Cryovac solutions, making our portfolio stronger and more resilient as SEE navigates recessionary environments,” continued Doheny. “We will generate strong synergies and accelerate innovation by combining Cryovac’s 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.”
Strategic Rationale
Broadens Cryovac Food Packaging Leadership with Highly Complementary Solutions
Bag-in-Box is probably the most environment friendly and sustainable manner to bundle and dispense fluids & liquids. This packaging format is rising penetration even in mature industries for its sustainability profile and shelf-life advantages. Tailwinds from sustainability and e-commerce secular shifts are accelerating the conversion from inflexible containers to flexibles. In previous financial downturns, the class has been extra resilient than others, outperforming GDP. Liquibox has a longtime place in options for wine, dairy, espresso and different drinks. SEE plans to complement its core competencies in barrier bag manufacturing, movie extrusion, automation and digital expertise along with Liquibox Bag-in-Box and fitments to drive accelerated mixed progress.
Attractive Growth Profile, Drives Cost Synergies
Liquibox has a powerful monetary profile and observe document of progress and expects 2022 full 12 months income and Adj. EBITDA of $362M and $85M respectively. SEE Operational Excellence in its built-in worth chain for versatile packaging supplies will present important productiveness and efficiencies to obtain $30M in annualized estimated value synergy financial savings by the tip of 12 months three (3). This transaction is a brand new alternative to leverage SEE’s proprietary M&A playbook to drive acquisitions to profitable outcomes, as demonstrated with the current case of Automated Packaging Systems.
Drives Rapid Geographic Expansion, Automation, and Innovation
Liquibox will profit from SEE’s geographical attain to drive synergistic progress alternatives. Liquibox filler tools expertise offers a gorgeous supply of progress for SEE Automation™. E-commerce prepared options for fluids & liquids will profit from SEE’s built-in strategy to digital and the development of prismiq™ digital packaging and printing options.
Liquibox’s latest innovation, Liquipure® is rising at enticing charges. In 2021, Liquibox launched VINIflow® Bag-in-Box shelling out faucet with 26% much less plastic to meet sustainability targets and maintain merchandise contemporary longer. Liquibox options and patented applied sciences are aligned with SEE’s internet optimistic round ecosystem technique.
Increases Exposure to Quick Service Restaurants and Other Attractive End Markets
With the acquisition, SEE plans to enhance penetration in Food Service and Quick Service Restaurants, the place the mixed options providing will embody:
- Cryovac Autopouch™ vertical type fill seal and Flex Prep™ automation options for back-of-house productiveness on condiment and sauces
- Liquibox Bag-in-Box options for soda fountains, dairy, urn liners, and to-go liquid field packaging.
Transaction Details, Financing and Approvals
Purchase worth of $1.15B on a cash-free debt-free foundation represents an estimated EV/Adj. EBITDA a number of of 13.5x and a a number of of 10x after factoring in solely value synergies. SEE Adj. EPS, unique of buy accounting, will likely be accretive instantly after shut.
SEE has secured $1.0B of dedicated debt financing with the steadiness of the consideration to be paid with money available. As of September 30, 2022, SEE had $1.4B of liquidity consisting of $1.1B accessible underneath our dedicated credit score services and $249M in money.
Post-transaction anticipated net-debt leverage of roughly 3.5x Adj. EBITDA anticipated to be considerably lowered inside 12 to 18 months, benefiting from sturdy pro-forma free money movement technology. SEE anticipates company household scores to stay unchanged by Moody’s and S&P.
Subject to the receipt of relevant regulatory approvals and different customary closing situations, the transaction is presently anticipated to be accomplished within the first quarter of 2023,. The Company plans to present its 2023 full 12 months outlook on February 16, 2023, inclusive of the acquisition of Liquibox, topic to the closing.
Advisors
Goldman Sachs & Co. LLC is serving as sole monetary advisor and Wachtell, Lipton, Rosen & Katz is serving as authorized advisor to SEE. KPMG suggested on Financial, Tax, HR, and IT due diligence.
Investor Conference Call
SEE will prolong the earnings convention name on Tuesday, November 1, 2022 to focus on this transaction. The convention will likely be webcast dwell. Interested events can view the occasions on Sealed Air’s Investors homepage at www.sealedair.com/buyers.
About SEE
Sealed Air (NYSE: SEE) is in business to shield, resolve essential packaging challenges, and make our world higher than we discover it. Our automated packaging options promote a safer, extra resilient, and fewer wasteful international meals provide chain, allow e-commerce, and shield items transported worldwide.
Our globally acknowledged manufacturers embody CRYOVAC® model meals packaging, SEALED AIR® model protecting packaging, AUTOBAG® model automated programs, BUBBLE WRAP® model packaging, SEEAutomation™ options and prismiq™ sensible packaging and digital printing.
SEE’s Operating Model, along with our industry-leading experience in supplies, engineering and expertise, create worth by way of extra sustainable, automated, and digitally linked packaging options.
We are main the packaging {industry} in making a extra environmentally, socially, and economically sustainable future and have pledged to design or advance 100% of our packaging supplies to be recyclable or reusable by 2025, with a bolder aim to attain net-zero carbon emissions in our international operations by 2040. Our Global Impact Report highlights how we’re shaping the way forward for the packaging {industry}. We are dedicated to a various workforce and caring, inclusive tradition by way of our 2025 Diversity, Equity and Inclusion pledge.
SEE generated $5.5 billion in gross sales in 2021 and has roughly 16,500 staff who serve clients in 114 international locations/territories. To be taught extra, go to sealedair.com.
Website Information
We routinely publish essential data for buyers on our web site, sealedair.com, within the Investors part. We use this web site as a way of revealing materials, private data and for complying with our disclosure obligations underneath Regulation FD. Accordingly, buyers ought to monitor the Investors part of our web site, as well as to following our press releases, SEC filings, public convention calls, displays and webcasts. The data contained on, or which may be accessed by way of, our web site isn’t included by reference into, and isn’t part of, this doc.
Forward-Looking Statements
This press launch comprises “forward-looking statements” throughout the that means of the protected harbor provisions of the Private Securities Litigation Reform Act of 1995 regarding our business, consolidated monetary situation and outcomes of operations. Forward-looking statements are topic to dangers and uncertainties, lots of that are exterior our management, which might trigger precise outcomes to differ materially from these statements. Therefore, you shouldn’t depend on any of those forward-looking statements. Forward-looking statements might be recognized by such phrases as “anticipate,” “believe,” “plan,” “assume,” “could,” “should,” “estimate,” “expect,” “intend,” “potential,” “seek,” “predict,” “may,” “will” and comparable references to future intervals. All statements aside from statements of historic information included on this press launch concerning our methods, prospects, monetary situation, operations, prices, plans and goals are forward-looking statements. Examples of forward-looking statements embody, amongst others, statements we make concerning anticipated future working outcomes, expectations concerning the outcomes of restructuring and different applications, anticipated ranges of capital expenditures and expectations of the impact on our monetary situation of claims, litigation, environmental prices, contingent liabilities and governmental and regulatory investigations and proceedings. The following are essential elements that we consider might trigger precise outcomes to differ materially from these in our forward-looking statements: international financial and political situations, forex translation and devaluation results, adjustments in uncooked materials pricing and availability, aggressive situations, the success of latest product choices, shopper preferences, the consequences of animal and food-related well being points, the consequences of epidemics or pandemics, together with the Coronavirus Disease 2019, detrimental impacts associated to the continued conflicts between Russia and Ukraine and associated sanctions, export restrictions and different counteractions thereto, adjustments in vitality prices, environmental issues, the success of our restructuring actions, the success of our merger, acquisition and fairness funding methods, the success of our monetary progress, profitability, money technology and manufacturing methods and our value discount and productiveness efforts, adjustments in our credit score scores, the tax profit related to the Settlement settlement (as outlined in our most up-to-date Annual Report on Form 10-Ok), regulatory actions and authorized issues, and the opposite data referenced within the “Risk Factors” part showing in our most up-to-date Annual Report on Form 10-Ok, as filed with the Securities and Exchange Commission, and as revised and up to date by our Quarterly Reports on Form 10-Q and Current Reports on Form 8-Ok. Any forward-looking assertion made by us relies solely on data presently accessible to us and speaks solely as of the date on which it’s made. We undertake no obligation to publicly replace any forward-looking assertion, whether or not written or oral, which may be constituted of time to time, whether or not on account of new data, future developments or in any other case.
Non-U.S. GAAP Information
Information reconciling forward-looking U.S. GAAP measures to non-U.S. GAAP measures isn’t accessible with out unreasonable effort. We haven’t offered steerage for probably the most instantly comparable U.S. GAAP monetary measures, as they aren’t accessible with out unreasonable effort due to the excessive variability, complexity, and low visibility with respect to sure particular objects, together with restructuring expenses, changes within the valuation of our “SEE Ventures” portfolio (which can embody debt, fairness methodology, or fairness investments), beneficial properties and losses associated to acquisition and divestiture of companies, the final word end result of sure authorized or tax proceedings, and different uncommon beneficial properties and losses. These objects are unsure, rely upon numerous elements, and might be materials to our outcomes computed in accordance with U.S. GAAP.
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