Silgan Holdings Inc. is taking another big swing in the dispensing and specialty closures market, agreeing to spend more than $900 million to acquire Weener Plastic Holdings BV.
Weener, based in Ede, The Netherlands, brings a network of 19 locations, primarily in Europe and the Americas, to Silgan, which has been beefing up its dispensing business in recent years through a series of deals.
And Silgan CEO Adam Greenlee said his company is "far from the end of the journey" in expanding the company's dispensing business.
Weener, which has been owned by private equity firm 3i Group plc since 2015, has been on Silgan's radar and the company was ready to move when a potential sale became evident.
"We've talked for a long time about Silgan being opportunistic in the market, right? And I would say that this is a quintessential Silgan deal in the sense that we've known this asset for a long time," Greenlee said. "We've looked at it over that period of time, gotten to know management. I think as they began to consider a sale process, we came to the table knowing the business, understanding what the synergy play was going to be, what the integration was going to look like."
"We brought with us speed and certainty and the ability to get through the diligence and understand what the business was and having financing in hand," the CEO said. "It was a perfect opportunity for us."
"We will continue to look for opportunities in this segment," Greenlee said on a July 24 conference call to discuss the $909 million (838 million euros) deal.
Weener makes dispensing closures for a wide variety of applications — think both food and personal care products, for example. Other applications include tube closures, aerosol caps, pharmaceutical closures, nutritional powders caps and scoops, and roll-on and stick packaging for deodorants. Weener also makes jars, bottles and containers.
Weener had 450 million euros in sales for the 12 months ended May 31 and earnings before interest, taxes, depreciation and amortization of 96 million euros. Silgan expects to capture 20 million euros in cost savings within 18 months of closing the deal, which is expected to happen during the fourth quarter.
For Silgan, a publicly traded company, the acquisition will add to adjusted earnings per share in 2025. Silgan will use cash on hand and borrowings to fund the transaction.
Weener employs about 4,000 people.
"The proposed acquisition of Weener represents the continuation of our strategy to expand our global dispensing and specialty closures franchise," Greenlee said in a separate statement.
News of the Weener Plastics acquisition follows previous deals for Albea's dispensing business in 2020 for $900 million and WestRock Co.'s dispensing business in 2017 for $1 billion.
"Our dispensing and specialty closures business is now the global leader in the market, generating more pro forma EBITDA than our entire company did just a decade ago. We've accomplished this by investing over $3.5 billion on five best-in-class dispensing acquisitions over the past eight years," Greenlee said.
Weener, during 3i's ownership, made four acquisitions of its own and almost doubled its EBITDA .
"Our partnership with 3i has been very successful. We have expanded into new geographies, significantly grown the size of our business and laid the foundation for WP to be the reference player in innovative and sustainable plastic packaging solutions," Weener CEO Adrian Whitfield said in a statement. "We are now ready for the next international growth phase."
Silgan is best known for its metal food can business, which is the largest in the United States. The company also makes plastic containers through a network of 18 manufacturing plants in the United States and Canada, according to the company's website.
"The Weener acquisition we announced this morning has all the hallmarks we look for in a franchise business with market-leading positions in its product categories, long-term customer relationships, strong margins, and demonstrated organic growth," Greenlee said.
Stamford, Conn.-based Silgan is No. 9 on the Plastics News ranking of North American blow molders and No. 8 in the PN ranking of injection molders.