In a deal that combines two global plastics packaging companies, Klöckner Pentaplast Group has signed an agreement to buy Linpac Group Ltd., the companies announced April 7.
The companies are already owned by the same investment firm, and the deal may foreshadow an initial public offering for the combined company later this year.
Terms of the deal were not disclosed. The transaction is subject to regulatory approvals and is scheduled to close this summer.
KP and Linpac are owned by Strategic Value Partners LLC, which does business as SVPGlobal. The Greenwich, Conn., firm specializes in distressed debt and value investments.
Linpac is based in Birmingham, England. It has been owned by SVPGlobal since 2015. Reuters had reported in November that SVPGlobal was trying to sell Linpac, and that the price tag could be $555 million.
SVPGlobal also tried to sell Montbaur, Germany-based Klöckner Pentaplast in 2014, but took the firm off the market when bids came in well below the asking price of $1.9 billion. SVPGlobal bought KP in 2012 for debt and equity of $1.3 billion.
KP has been planning an initial public offering. Reuters reported April 7 that the IPO may now be delayed until the Linpac deal is finalized.
Combining KP and Linpac could make an IPO more attractive, both because of the size of the company and the potential for synergies.
SVPGlobal could also consider spinning off pieces of the business that would be more attractive to certain buyers or IPO investors, for example the health care or food packaging businesses.