Plastics packaging maker Sealed Air Corp. is buying Liqui-Box from private equity firm Olympus Partners in a $1.15 billion deal.
Charlotte, N.C.-based Sealed Air said the transaction is highly complementary to the company's Cryovac Fluids & Liquids business, which the company described as its "fastest growing area."
Liqui-Box, as the name suggests, uses flexible plastic containers held within paper boxes to deliver liquids in a variety of markets, including beverage, food, consumer goods and industrial. It uses the name Liquibox in its marketing.
The company also makes bags and liners used in restaurants for beverage urns, bottles, dispenser attachments, filling equipment and liners for intermediate bulk containers.
"Liquibox is a highly strategic acquisition to fuel growth and earnings power in our SEE Operating Engine," CEO Ted Doheny said in a statement.
Liqui-Box, based in Richmond, Va., was founded in 1961 and has more than 1,300 employees at 18 global locations. Revenue for this year is expected to come in at $362 million.
"This move broadens the breadth of Cryovac solutions, making our portfolio stronger and more resilient as SEE navigates recessionary environments," Doheny said. "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."
Earnings before interest, taxes, depreciation and amortization, or EBITDA, are expected to be $85 million this year, and Sealed Air expects to save $30 million in annual costs within three years by combining operations. The purchase price of $1.15 billion represents an earnings EBITDA multiple of 13.5, which drops to 10 times after cost savings, Sealed Air said.
The transaction is subject to regulatory approval and is slated to close during the first quarter of 2023, Sealed Air said.
Olympus Partners acquired Liqui-Box Holdings Inc. in October 2015.
Follow Plastics News for updates to this story.