M&A Update: European plastic packaging on the road to consolidation
Spring 2012: The plastic packaging industry in Europe is valued at €38 billion annually, accounts for a quarter of global supply and generated nearly half of all M&A transactions in the sector.
This report highlights both the opportunities and challenges for European companies in the sector.
The key observations from our research:
Over the past three years almost half of all global M&A deals in the plastic packaging sector took place in Europe, attracting both trade acquirers and financial investors.
Whilst some segments of the industry, such as flexible food packaging, are dominated by a few large players the European industry as a whole remains highly fragmented. We expect consolidation trends to continue.
Private equity firms have been significant investors. The common theme has been for private equity firms to grow initial ‘platform’ investments through bolt-on acquisitions, taking advantage of operational synergies.
Cross-border deals accounted for 40% of all transactions in 2011. Much of this is attributable to the global sourcing requirements of major customers.
Typical acquisition multiples have remained at between 5x and 7x EBITDA over the past three years. However higher acquisition multiples have been paid for some companies, particularly those offering niche products.