Plastics & Packaging - pmcf.compackaging subsidiaries include Yorker Packaging, a manufacturer of injection molded specialty caps and closures, and WNA Inc., a lead-ing producer of

2015

WWW.PMCF.COM

M&A QUARTERLYPlastics & Packaging2 0 1 5 Y E A R I N R E V I E W

2 | M & A Q UA R T E R LY — P L A ST I C & PAC K AG I N G

JOHN HARTManaging Director248.223.3468 | [email protected]

• 15+ Years of M&A Advisory Experience• Exclusively Focused on Executing Plastics and

Packaging Transactions• Has Led Successful Completion of More Than

20 Transactions in Plastics and Packaging Over the Last 5 Years

• Authored Over 25 Industry M&A Reports and a Frequent Speaker at Trade Conferences

• Network Includes Executive Contacts with Strategic and Private Equity Groups in Packaging

RYAN SHUCHMANVice President248.603.5372 | [email protected]

• 10+ Years of M&A Advisory & Finance Experience• Exclusively Focused on Executing Plastics and

Packaging Transactions• Successfully Completed Transactions in Rigid &

Flexible Plastic Packaging, Corrugated Packaging, Raw Materials, and Engineered Components

• Conducts In-Depth Research on Packaging Market M&A and Industry Growth Trends

ABOUT PMCF

P&M Corporate Finance (“PMCF”) is an investment banking

firm, focused exclusively on middle market transactions, with

professionals in Chicago, Detroit, and across the globe through

Corporate Finance International associates. Our dedicated

Plastics and Packaging Group has deep industry knowledge and

covers a wide range of processes including thermoforming, sheet

and film extrusion, blow molding, injection molding, and resin and

color compounding. Offering a breadth of advisory services, the

Plastics and Packaging Group has helped clients worldwide meet

their sale, acquisition, financing, and strategic growth objectives.

Packaging: Medical Thermoforming

Company Sale to Strategic Buyer

Chicago 225 W. Washington Street, Suite 2700 Chicago, IL 60606 312.602.3600 Detroit Two Towne Square, Suite 425 Southfield, MI 48076 248.603.5300

About PMCF P&M Corporate Finance (“PMCF”) is an investment banking firm, focused exclusively on middle market transactions, with professionals in Chicago, Detroit, and across the globe through Corporate Finance International associates. Our dedicated Plastics and Packaging Group has deep industry knowledge and covers a wide range of processes including thermoforming, sheet and film extrusion, blow molding, injection molding, and resin and color compounding. Offering a breadth of advisory services, the Plastics and Packaging Group has helped clients worldwide meet their sale, acquisition, financing, and strategic growth objectives. Investment Banking Services:

•  Mergers & Acquisitions

•  Sales & Divestitures

•  Capital Raising

•  Sale Planning

Packaging: Specialty Food Blow Molding & Decoration


PMCF Transaction Announcements

NOTE: PREGRAPHICS VERSION

Packaging: Beverage Injection Molded Preforms

Strategic Acquisition Advisory






























INVESTMENT BANKING SERVICES:

• Mergers & Acquisitions

• Sales & Divestitures

• Strategic Assessments

• Capital Raising

• Sale Planning

PACKAGING: SPECIALT Y FOODBlow Molding & DecorationCompany Sale to Strategic Buyer

PACKAGING: BEVERAGEInjection Molded PreformsStrategic Acquisition Advisory

PACKAGING: MEDICALThemoformingCompany Sale to Strategic Buyer

has been acquired by

a portfolio company ofhas acquired

a subsidiary of

has been acquired by

LOCATIONSChicago

225 W. Washington Street

Suite 2700

Chicago, IL 60606

312.602.3600

Detroit

Two Towne Square

Suite 425

Southfield, MI 48076

248.603.5300

W W W. P M C F. C O M | 3

0

50

100

150

200

250

300

350

400

2009 2010 2011 2012 2013 2014 2015

199

61

80

266

60

67340

393

220

55

72

347

235

68

79

382

213

56

59

328

237

50

59

346

202

49

77

328

NU

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ER

OF

DE

AL

S

F I N A N C I A L A D D - O NS T R AT E G I C F I N A N C I A L P L AT F O R M

2 0 1 5 2 0 1 4

16%

R I G I D PA C K A G I N G

15%

F L E X I B L EPA C K A G I N G

20%

C U S T O MM O L D I N G

15%R E S I N

B O T T L E S

C L O S U R E S

C O N S U M E R

B U I L D I N G P R O D U C T S

15%6%

5%4%

4%I N D U S T R I A L

9%


14%


28%


18%R E S I N

B O T T L E S

C L O S U R E S

1 % C O N S U M E R

14%

2%

5%

I N D U S T R I A L 9%B U I L D I N G

P R O D U C T S

2 0 1 5 2 0 1 4

16%


15%


20%


15%R E S I N

B O T T L E S

C L O S U R E S

C O N S U M E R

B U I L D I N G P R O D U C T S

15%6%

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9%


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1 % C O N S U M E R

14%

2%

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I N D U S T R I A L 9%B U I L D I N G

P R O D U C T S

TRANSACTIONS BY BUYER T YPE

TRANSACTIONS BY PRODUCT SEGMENT

2015 Market Summary & Outlook

In 2015 plastics and packaging market factors of note included steady de-mand, favorable input costs, high levels of available debt (at low interest rates), strong corporate balance sheets, and an oversupply of aggressive strategic and private equity acquirers.

These drivers supported very healthy plastics and packaging transaction volume in 2015, down only slightly versus 2014, as the number of deals completed in 2015 trended closer to 2013 levels. Plastics and packaging transactions totaled 328 in 2015 versus a total of 346 in 2014.

Key 2015 plastics and packaging M&A trends included the following:

• U.S. buyers completed roughly 20 fewer plastics and packaging transactions in 2015 compared with 2014 levels, offset by increasing deal volume among foreign buyers in the U.S. and abroad

• The proportion of total plastics and packaging transactions completed by financial buyers was nearly 40% in 2015, up from 32% in 2014 as private equity remains very aggressive

• Transaction mix fluctuated in 2015 as the rigid and flexible packaging segments combined for 31% of total transactions, an 8% increase. Conversely, custom molding and building products combined for just 26% of 2015 deals, an 11% decline

• Publicly traded plastics and packaging businesses remained at elevated valuations, but EV/EBITDA values peaked mid year and declined in the second half

Key transactions for the quarter included the following:

• $130 billion dollar merger between DuPont (NYSE:DD) and The Dow Chemical Company (NYSE:DOW)

• Newell Rubbermaid Inc.’s (NYSE:NWL) acquisition of Jarden Corp (NYSE:JAH) for $15 billion

• Solvay SA’s (ENXTBR:SOLB) acquisition of competitor Cytec Industries (NYSE:CYT) for approximately $6.4 billion

• KIRKBI A/S and The Blackstone Group L.P.’s (NYSE:BX) acquisition of Armacell GmbH for $1 billion

• RPC Group’s (LSE:RPC) acquisition of European injection molded packaging business Global Closure Systems for $715 million

2015’s robust activity levels reflect a strong M&A environment for plastics and packaging and what is generally agreed to be a “seller’s market.” We’ve received numerous inquiries as to whether the M&A market has peaked and when we believe it will start to decline. Our current view is plastics and pack-aging M&A will remain active in 2016, despite potential economic and po-litical headwinds, given the sector’s historical resilience and the continued fragmentation among the supply base. However, our outlook for 2017 is less certain and we currently expect some contraction in M&A given the length of the current, robust cycle.

SECTOR 2012 2013 2014% of Total 2015 % of Total

'14 - '15 Change

% Change

Blow Molding 30 22 23 7% 22 7% -1 -4%

Injection Molding

110 86 95 27% 102 31% 7 7%

Film 68 60 65 19% 59 18% -6 -9%

Resin / Color & Compounding

62 68 72 21% 54 16% -18 -25%

Sheet & Thermoforming

32 38 23 6% 30 9% 7 30%

Specialty 80 54 68 20% 61 19% -7 -10%

TOTAL 382 328 346 100% 328 100% -18 -5%

Source: P&M Corporate Finance, Company Reports, Bloomberg, Capital IQ


FEATURED SECTOR TRANSACTIONS

December 2015 – Newell Rubbermaid (NYSE: NWL) has acquired

Jarden Corporation (NYSE: JAH) for approximately $15 billion. The

combined entity is expected to generate $16 billion in annual sales

and $3 billion in EBITDA. Both companies have a significant pres-

ence in plastic packaging and are focused on branded consumer

products. Cost savings resulting from the deal are expected to reach

approximately $500 million over the next four years. Notable Jarden

packaging subsidiaries include Yorker Packaging, a manufacturer of

injection molded specialty caps and closures, and WNA Inc., a lead-

ing producer of thermoformed foodservice packaging.

December 2015 – Plastic packaging consolidator RPC Group plc

(LSE:RPC) has acquired Global Closure Systems (GCS) from French

investment firm PAI Partners. GCS was formed in 2005 when PAI Part-

ners acquired the beverage and specialty closures business of Crown

Holdings Inc. The deal, which will combine two European leaders in

rigid packaging, is valued at approximately $715 million. The GCS ac-

quisition will enhance RPC’s existing closures business and bolster

the company’s global rigid packaging platform. RPC is expecting an-

nual synergies from the deal to exceed $15 million, mostly resulting

from improved resin purchasing capabilities.

2 0 1 4 2 0 1 5

15%

27%

27%

31%

6%

42%

32%

20%

P U B L I C A C Q U I R E R


P R I VAT EA C Q U I R E R P R I VAT E

A C Q U I R E R

P R I VAT EE Q U I T Y ( P E ) P R I VAT E

E Q U I T Y ( P E )

P E t o P E

P E t o P E

Global Plastic Packaging M&A

2014 2015

Food & Beverage 58 71

Industrial 22 14

Consumer 16 30

Construction - -

Medical 8 13

Automotive - -

Transportation - -

Electronics - -

TOTAL 104 128

2014 2015

# %PACKAGING # %PACKAGING

Rigid 33 32% 54 42%

Flexible 49 47% 48 38%

Bottling 16 15% 12 9%

Caps & Closures 6 6% 14 11%

TOTAL 104 100% 128 100%

TRENDS IN M&A

• Global plastic packaging transaction volume experienced strong growth in

2015, up by 23% versus 2014 levels, driven by active strategic buyers

• Rigid packaging experienced the highest percentage growth among

packaging types in 2015, growing by 21 deals year over year, and

representing 42% of total deals completed in plastic packaging

• Packaging manufacturers focused on Food & Beverage, Consumer,

and Medical end markets remained attractive acquisition targets for

both strategic and financial buyers in 2015, with all three end markets

exceeding 2014 transaction totals

Sources: P&M Corporate Finance, Plastics News, Company Reports, Bloomberg


TRANSACTIONS BY END MARKET

PACKAGING TRANSACTION DETAIL

BUYER T YPE

0

30

60

90

120

150

2010 2011 2012 2013 2014 2015

80 66 65

53

71

47

60

44

79

495148

131

114 118 118104

128

NU

MB

ER

OF

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F I N A N C I A LS T R AT E G I C



October 2015 – Amcor Limited (ASX:AMC), a global leader in rigid

plastic packaging, has acquired Encon, Inc. for approximately $55

million. Encon, also known as Eco-Groupe Inc., produces injection

molded PET preforms primarily for the beverage industry. The Day-

ton, Ohio-based company has annual sales of approximately $110

million. The acquisition will add significant production capacity and

technology assets to Amcor’s existing preform manufacturing opera-

tion. Encon’s attractive portfolio of technology includes the innovative

Viper modular molding system and Eco-Pod mobile manufacturing

technology. PMCF served as the exclusive financial advisor to Amcor.

December 2015 – PSB Industries (ENXTPA:PSB), a leading manufac-

turer of cosmetic packaging based in France, announced that it has

agreed to acquire Topline Products Company. Topline Products, which

is headquartered in Wayne, New Jersey, manufactures innovative

beauty packaging and supplies for clients worldwide. The Topline deal

is PSB’s second recent acquisition of a US-based cosmetic packaging

manufacturer, as the company continues to bolster its North Amer-

ican footprint via acquisitive growth. PSB acquired New York-based

C+N Packaging in July 2014. Following the Topline acquisition, PSB

will have five manufacturing facilities in North America, with three

located in the United States and two in Mexico.

2 0 1 4 2 0 1 5

7%

36%

21%

36%

8%

37%

32%

23%

P U B L I C A C Q U I R E R P U B L I C

A C Q U I R E R

P R I VAT EA C Q U I R E R


P R I VAT EE Q U I T Y ( P E )

P R I VAT EE Q U I T Y ( P E )

P E t o P E P E t o

P E

Global Injection Molding M&A

2014 2015


Industrial 19 21

Consumer 13 19

Construction - 2

Medical 13 17

Automotive 33 24

Transportation 1 1

Electronics 8 4

Total 95 102

2014 2015

U.S.-to-U.S. 26 29

U.S.-to-Foreign 5 6

Foreign-to-U.S. 11 6

Foreign 53 61

Total 95 102

Distressed 2 5

TRENDS IN M&A

• Injection molding transaction volume reached 102 deals in 2015, up 7%

versus 2014, as the number of transactions involving injection molders

surpassed the 100 annual deals watermark for the fourth time since 2010

• Financial buyers significantly grew their investments in injection molding

by 52% year over year, completing 14 more Injection Molding transactions

in 2015 versus 2014 levels

• Transaction volumes by end market were up across 5 of 8 segments in

2015, while the number of deals involving automotive injection molders

declined by 9 deals year over year

Sources: P&M Corporate Finance, Plastics News, Company Reports



BUYER T YPE

SECTOR DEAL STATISTICS

0

20

40

60

80

100

120

2010 2011 2012 2013 2014 2015

70 67 58

52

57

29

68

27

61

4136 39

106 106 110

8695

102

NU

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ER

OF

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2 0 1 4 2 0 1 5

15%

28%

29%

28%

6%

37%

32%

25%




A C Q U I R E R


E Q U I T Y ( P E )

P E t o P E

P E t o P E

Global Film M&A

2014 2015


Industrial 18 14

Consumer 8 8

Construction 3 -

Medical 4 5

Automotive 2 -

Transportation - -

Electronics - 1

Total 65 59




BUYER T YPE



December 2015 – Pamplona Capital Management portfolio compa-

ny and blown film platform Charter NEX Films Inc. has acquired Op-

timum Plastics. Charter NEX acquired Bloomer Holdings Inc., doing

business as Optimum Plastics, from Detroit-based investment firm

Huron Capital Partners. Huron Capital formed the current Optimum

Plastics platform via its acquisitions of engineered films producer

Bloomer Plastics in 2012 and blown film manufacturer Optimum

Plastics in 2014. Optimum Plastics currently has two facilities lo-

cated in Wisconsin and Ohio and offers a variety of specialty film

and flexible packaging products. The acquisition provides Charter

NEX with highly complementary production capabilities in films, roll-

stock, and converting. Optimum has annual revenues of more than

$100 million.

December 2015 – ProAmpac LLC, a leading flexible packaging plat-

form owned by Wellspring Capital Management, has acquired Coating

Excellence International (CEI) from investment firm Mason Wells. CEI,

which has over 900,000 square feet of manufacturing space at its

two Wisconsin facilities, produces a range of flexible packaging prod-

ucts and woven poly bags. ProAmpac, which is the result of a recent

merger between large industry players Prolamina and Ampac, will

add capacity and expand its share of the US flexible packaging mar-

ket via the acquisition. CEI, which has annual sales of approximately

$250 million, is the first acquisition for ProAmpac since being formed

in the August 2015 merger.

TRENDS IN M&A

• Transactions involving film extruders and converters were down by 6 deals

in 2015, versus 2014, as both financial and strategic buyers completed

slightly fewer deals within the sector

• Buyer type transaction mix in the film segment shifted in 2015, as public

acquirers represented a greater share of strategic acquisitions, driving

a 6% year over year increase in the proportion of deals completed by

strategic buyers

• Cross-border film M&A featured a declining number of foreign buyers

acquiring U.S. targets, down by 50% in 2015 compared to 2014, while

overseas buying by U.S.-based processors was also down

0

10

20

30

40

50

60

70

80

2010 2011 2012 2013 2014 2015

51 48 45

23

41

19

36

29

37

22

27 27

78 7568

6065

59

NU

MB

ER

OF

DE

AL

S


2014 2015

U.S.-to-U.S. 12 12

U.S.-to-Foreign 3 3

Foreign-to-U.S. 4 2

Foreign 46 42

Total 65 59

Distressed 2 1


Global Resin and Color & Compounding M&A


2 0 1 4 2 0 1 5

5%

47%

22%

26%

8%

44%

24%

24%

P U B L I C A C Q U I R E R P U B L I C

A C Q U I R E R


A C Q U I R E R


E Q U I T Y ( P E )

P E t o P E P E t o

P E

2 0 1 4 2 0 1 5

40%60%

30%

70%

C O L O R &C O M P O U N D I N G

C O L O R &C O M P O U N D I N G

R E S I NS U P P L I E R

R E S I NS U P P L I E R


TRANSACTION SECTOR DETAIL

BUYER T YPE



October 2015 – Belgium-based Solvay SA (EBR: SOLB), a leading

supplier of materials to plastics industry, has acquired the long-fi-

ber thermoplastics (LFT) business and technology of Epic Polymers

GmbH. Epic Polymers is a German manufacturer of engineered ther-

moplastics for a variety of industrial applications. The acquisition of

Epic Polymers’ LFT business will strengthen Solvay’s position in ther-

moplastics and support the company’s plan to expand its structur-

al lightweighting capabilities. Epic’s LFT are progressively replacing

metal structural components in both automotive and aerospace end

markets. The LFT technology will complement Solvay’s multi-billion

dollar July 2015 acquisition of composites resin supplier Cytec Indus-

tries, as the company actively expands its composites and lightweight

resin systems business. Solvay generated $10.6 billion in sales

during 2014.

December 2015 – Chemline, Inc. has acquired California-based T.A.

Davies Company, a producer of specialty polyurethane resins. T.A. Da-

vies provides a range of polyurethane systems and custom formula-

tions suitable for open casting, rotomolding and machine dispensing.

The acquisition, which is a first for St. Louis, Missouri-based Chem-

line, will provide additional capacity and complementary product

lines for the company’s rapidly growing polyurethane business. The

T.A. Davies acquisition also adds a West Coast manufacturing facility

to Chemline’s growing footprint.

TRENDS IN M&A

• Transactions involving resin suppliers and color & compounders were

down 25% year-over-year following a multi-year high point for segment

M&A activity in 2014

• Resin suppliers accounted for 70% of transaction mix in 2015 versus color

and compounding deals, a 10% increase in their proportion of total deal

volume versus the comparison period

• The declining number of domestic transactions involving the sale of U.S.

resin suppliers and color & compounders was a significant driver of the

overall decrease in deal volume, falling by 11 deals in 2015 compared to

2014 levels and reflecting in part the higher level of consolidation in

North America

0

10

20

30

40

50

60

70

80

2010 2011 2012 2013 2014 2015

58 42 44

18

52

16

53

19

37

17

13

14

71

5662

6872

54

NU

MB

ER

OF

DE

AL

S


2014 2015

U.S.-to-U.S. 21 10

U.S.-to-Foreign 5 3

Foreign-to-U.S. 6 6

Foreign 40 35

Total 72 54

Distressed 3 -


2 0 1 4 2 0 1 5

30%35%

35%

3%

47%

33%

17%




A C Q U I R E R


E Q U I T Y ( P E )

P E t o P E

Global Sheet and Thermoforming M&A

2014 2015


Industrial 11 6

Consumer 2 5

Construction - 1

Medical 1 1

Automotive - 1

Transportation 2 2

Electronics - -

Total 23 30




BUYER T YPE



November 2015 – TEQ Packaging, a subsidiary of publicly traded

ESCO Technologies (NYSE:ESE), has acquired Indiana-based thermo-

former Fremont Plastics. Fremont produces thermoformed medical

disposables for the surgical suite including light handle covers and

tray packaging for instruments. The acquisition of Fremont expands

TEQ’s medical thermoforming capabilities and provides a range of

new product applications. Fremont has two state of the art clean

rooms and runs six thermoforming lines which add significant capac-

ity to TEQ’s growing thermoforming operation. PMCF served as the

exclusive financial advisor to Fremont.

November 2015 – Group Guillin (ENXTPA:ALGIL), a leading European

producer of thermoformed trays and packaging to the food industry,

has acquired Kreis Pack. Poland-based Kreis Pack manufactures and

distributes a variety of thermoformed and injection molded dispos-

able plastic food packaging products. Kreis Pack’s products include

containers, cups, lids, and trays. The acquisition, which is Group Guil-

lin’s first since 2010, aligns with the company’s strategic initiative to

increase its Polish presence and expand its portfolio of food pack-

aging products. Group Guillin generated more than $558 million in

annual sales for 2015.

TRENDS IN M&A

• Sheet and thermoforming transactions were up by 7 deals in 2015, an

increase of 30% compared to 2014, as deal volume tracked more toward

historical levels following an abnormally low 2014

• Food & Beverage deals represented the greatest proportion of transaction

mix in 2015, as the number of transactions involving sheet and

thermoforming businesses focused on the food & beverage end market

doubled year over year

• Foreign sheet and thermoforming deals represented more than 70% of

total transaction volume in 2015, reflecting buyers’ overseas focus given

the high levels of consolidation within the US market

0

5

10

15

20

25

30

35

40

2010 2011 2012 2013 2014 2015

13 21 20

12

22

16

15

8

19

11

12

1125

32 32

38

23

30

NU

MB

ER

OF

DE

AL

S


2014 2015

U.S.-to-U.S. 7 6

U.S.-to-Foreign - 2

Foreign-to-U.S. 2 2

Foreign 14 20

Total 23 30

Distressed 1 -


Global Blow Molding M&A


2 0 1 4 2 0 1 5

30%

30%

27%

4%

46%

32%

18%






E Q U I T Y ( P E )

P E t o P E

13%P E t o P E

2014 2015


Industrial 4 6

Consumer 4 6

Construction - -

Medical - 1

Automotive 2 1

Transportation - -

Electronics - -

Total 23 22



BUYER T YPE


October 2015 – Carr Management, Inc., a portfolio company of in-

vestment firm Behrman Capital, completed an acquisition of Massa-

chusetts-based Hillside Plastics, Inc. Hillside is a producer of blow

molded containers, including the proprietary Sugarhill Pure Maple

Syrup jug product line. Carr Management, headquartered in Nash-

ua, New Hampshire, is a specialized manufacturer of blow-molded,

HDPE bottles for the dairy, water, food, industrial, and nutraceutical

industries. The Hillside deal, which is Carr Management’s fist acquisi-

tion since partnering with Behrman Capital in October 2014, will add

highly complementary product lines and manufacturing capabilities

to Carr’s current platform. PMCF served as the exclusive financial ad-

visor to Hillside.

October 2015 – Consolidated Container Co. (CCC), a leading plastic

packaging platform backed by Bain Capital, has acquired the assets

of Precision Plastics Inc. Precision Plastics is based in Chippewa

Falls, WI and primarily produces HDPE containers for the dairy indus-

try. The Precision Plastics deal adds a Wisconsin production facility

for CCC, filling a gap in the company’s US manufacturing footprint,

and providing CCC with its 55th rigid packaging manufacturing plant.

TRENDS IN M&A

• Blow molding M&A activity recorded a third year of healthy, but flat activity

in 2015, with sector deal volume down by one deal compared to 2014

• Transactions by end market shifted in 2015, despite flat overall growth,

as both industrial and consumer end markets saw increased deal flow.

Conversely food & beverage transactions fell by 38%

• Publicly traded strategic buyers were more acquisitive in 2015 relative to

2014, driving a 7% increase in the proportion of total blow molding deals

completed by strategic buyers year over year

0

5

10

15

20

25

30

2010 2011 2012 2013 2014 2015

17 10 15

15

11

11

13

10

14

8

10

8

27

18

30

22 23 22

NU

MB

ER

OF

DE

AL

S



2014 2015

U.S.-to-U.S. 7 3

U.S.-to-Foreign 1 -

Foreign-to-U.S. 1 1

Foreign 14 18

Total 23 22

Distressed 4 2


2014 2015

Food & Beverage 3 4

Industrial 22 26

Consumer 4 6

Construction 29 17

Medical 5 1

Automotive 1 4

Transportation 4 2

Electronics - 1

Total 68 61



Additional Global Specialty Sector Activity

TRENDS IN M&A

• M&A activity in 2015 involving specialty plastic process types, including

rotational molding, foam, pipe & tube, profile extrusion, and composites,

declined by 7 deals, or 10% year over year

• Mix between financial and strategic buyers shifted in 2015 as M&A activity

among financial buyers rose significantly, accounting for 44% of specialty

M&A volume versus 24% in 2014

• Industrial and construction remained the most active end markets for

transactions in the specialty segment, despite a 41% year over year

decline in the number of construction deals


Foam

November 2015 – Investment firm Charterhouse Capital Partners’

portfolio company Armacell S.A. has been acquired by private eq-

uity investors Blackstone (NYSE:BX) and Kirkbi A/S. German-based

Armacell is a leading manufacturer of flexible insulation foams for

mechanical equipment. Armacell’s two main business segments in-

clude specialized foam insulation and light engineered foams. The

company’s end market applications include commercial, residential,

construction, industrial, oil & gas, and automotive. Armacell current-

ly operates in Europe, the Middle East, India, Asia, North America

and South America. Armacell will use Blackstone’s significant capital

resources and expertise to expand their international footprint and

guide the company through its next phase of strategic growth. Arma-

cell generated more than $500 million of sales in 2014.

December 2015 – Foam manufacturer PFB Corporation (TSX: PFB)

has acquired Poly Foam Inc. via its subsidiary Plasti-Fab. Poly Foam

produces a variety of foam applications including roofing insulation,

protective packaging and flotation. PFB is a vertically integrated

manufacturer of insulating products. PFB’s energy efficient foam

products use polystyrene technology in residential and commercial

structures. PFB will add additional capacity for its insulation prod-

ucts business while maintaining Poly Foam’s injection and foam

molded plastics operation at the Minnesota facility. Canada-based

PFB will use the Poly Foam acquisition to bolster its US presence and

expand its presence in the regional building material market.

Fabrication

October 2015 – Plastic parts fabricator and distributor National

Plastics & Seals has acquired Innovative Acrylic Design (IAD). IAD

manufactures custom plastic point-of-purchase displays and cham-

bers for a variety of end market applications. Following the acquisi-

tion National Plastics consolidated the manufacturing operation of

IAD into its Schaumberg, IL-based production facility. IAD adds laser

cutting and engraving capabilities for National Plastics’, which bol-

sters the company’s custom plastic design and prototyping capabili-

ties. National Plastics retained IAD’s brand name and management

team following the acquisition.

0

20

40

60

80

100

2010 2011 2012 2013 2014 2015

57 32 53

27

30

24

52

16

34

27

29

28

86

60

80

54

6861

NU

MB

ER

OF

DE

AL

S


Source: P&M Corporate Finance, Plastics News, Company Reports

W W W. P M C F. C O M | 11

§  Plastics companies tracked in the PMCF Plastics & Packaging Index slightly outperformed the S&P 500 at the closing of Q4 2015, despite being below or in parity with the S&P 500 index through most of the fourth quarter of the year

§  Publicly traded plastics and packaging companies experienced declining EV/EBITDA valuations in the second half of 2015 following a valuation high point in the second quarter of the year

*Includes all disclosed transactions with at least one U.S. party Sources: Capital IQ, Pitchbook, and PMCF Estimates

§  U.S. middle market M&A activity was relatively flat in 2015, compared to 2014, with both total deal volume and total transaction value down slightly

§  U.S. private equity activity declined in terms of both deal volume and capital invested, despite high levels of uninvested capital, as the supply of quality acquisition targets has dwindled after years of sustained activity

PMCF Plastics and Packaging Index

S&P 500 Index

PMCF Plastics & Packaging Index Valuation

Note: Chart highlights relative stock price return

Note: Multiples based on most recent data available as of printing

M&A Quarterly – Plastics & Packaging

www.pmcf.com

10

PMCF Plastics & Packaging Index

U.S. Middle Market Transaction Summary (All Industries)

Source: Capital IQ


80.00%

90.00%

100.00%

110.00%

120.00%

130.00%

140.00%

Q4 '13 Q1 '14 Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15Revenue Multiple

Average 1.2x 1.2x 1.2x 1.2x 1.2x 1.3x 1.4x 1.4x 1.3xMedian 1.1x 1.1x 1.1x 1.2x 1.1x 1.2x 1.3x 1.3x 1.2x

EBITDA MultipleAverage 9.4x 9.3x 9.3x 9.3x 9.2x 10.6x 11.8x 11.5x 10.8xMedian 8.6x 8.8x 9.1x 9.2x 8.7x 10.2x 10.4x 9.8x 10.1x

1153110342

1431516126

18133

16027

18624 18337

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

2008 2009 2010 2011 2012 2013 2014 2015

U.S. M&A Activity: D eals < $500 MillionDollars in Billions

D eal Volume D eal Value

2382

1605

24082686

3120 3265

39233602

$-‐

$200

$400

$600

$800

$1,000

$1,200

$1,400

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2008 2009 2010 2011 2012 2013 2014 2015

Private Equity InvestmentsDollars in Billions

D eal Volume Capital Invested*Includes all disclosed transactions with at least one U.S. partySources: Capital IQ, Pitchbook, and PMCF Estimates

• U.S. middle market M&A activity was relatively flat in 2015, compared to 2014, with both total deal volume and total transaction value down slightly

• U.S. private equity activity declined in terms of both deal volume and capital invested, despite high levels of uninvested capital, as the supply of quality acquisition targets has dwindled after years of sustained activity

• Plastics companies tracked in the PMCF Plastics & Packaging Index slightly outperformed the S&P 500 at the closing of Q4 2015, despite being below or in parity with the S&P 500 index through most of the fourth quarter of the year

• Publicly traded plastics and packaging companies experienced declining EV/EBITDA valuations in the second half of 2015 following a valuation high point in the second quarter of the year

Q4 '13 Q1 '14 Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15

Revenue Multiple

Average 1.2x 1.2x 1.2x 1.2x 1.2x 1.3x 1.4x 1.4x 1.3x

Median 1.1x 1.1x 1.1x 1.2x 1.1x 1.2x 1.3x 1.3x 1.2x

EBITDA Multiple

Average 9.4x 9.3x 9.3x 9.3x 9.2x 10.6x 11.8x 11.5x 10.8x

Median 8.6x 8.8x 9.1x 9.2x 8.7x 10.2x 10.4x 9.8x 10.1x

PMCF PL ASTICS & PACKAGING INDEX VALUATION

U.S. M&A ACTIVIT Y: DEAL S < $500 MILLION (dollars in billions)

PRIVATE EQUIT Y INVESTMENTS (dollars in billions)

PMCF Plastics & Packaging Index

02000400060008000

100001200014000160001800020000

2008 2009 2010 2011 2012 2013 2014 2015

D I S C L O S E D D E A L VA L U ED E A L V O L U M E

11,53110,324

14,31516,126

18,133

16,027

18,624 18,337

0$50$100$150$200$250$300$350$400$450$500

*Includes all disclosed transactions with at least one U.S. partySources: Capital IQ, Pitchbook, and PMCF Estimates

2008 2009 2010 2011 2012 2013 2014 20150

500

1000

1500

2000

2500

3000

3500

4000

4500

C A P I TA L I N V E S T E DD E A L V O L U M E

2,382

1,605

2,4082,686

3,1203,265

3,9233,602

0

$200

$400

$600

$800

$1,000

$1,200

$1,400

PMCF Plastics and Packaging Index

This market overview is not an offer to sell or a solicitation of an offer to buy any security. It is not intended to be directed to investors as a basis for making an investment decision. This market overview does not rate or recommend securities of individual companies, nor does it contain sufficient information upon which to make an investment decision. P&M Corporate Finance, LLC will seek to provide investment banking and/or other services to one or more of the companies mentioned in this market overview. P&M Corporate Finance, LLC, and/or the analysts who prepared this market update, may own securities of one or more of the companies mentioned in this market overview. The information provided in this market overview was obtained from sources believed to be reliable, but its accuracy cannot be guaranteed. It is not to be construed as legal, accounting, financial, or investment advice. Information, opinions, and estimates reflect P&M Corporate Finance, LLC’s judgment as of the date of publication and are subject to change without notice. P&M Corporate Finance, LLC undertakes no obligation to notify any recipient of this market overview of any such change. The charts and graphs used in this market overview have been compiled by P&M Corporate Finance, LLC solely for illustrative purposes. All charts are as of the date of issuance of this market overview, unless otherwise noted. The PMCF Plastics Index may not be inclusive of all companies in the plastics industry and is not a composite index of the plastic industry sector returns. Index and sector returns are past performance which is not an indicator of future results. This market overview is not directed to, or intended for distribution to, any person in any jurisdiction where such distribution would be contrary to law or regulation, or which would subject P&M Corporate Finance, LLC to licensing or registration requirements in such jurisdiction.

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Notable Awards for PMCF:


2013 Industrial Manufacturing/Distribu7on

Deal of the Year

2015 FINALIST

This market overview is not an offer to sell or a solicitation of an offer to buy any security. It is not intended to be directed to investors as a basis for making an investment decision. This market overview does not rate or recommend securities of individual companies, nor does it contain sufficient information upon which to make an investment decision.

P&M Corporate Finance, LLC will seek to provide investment banking and/or oth-er services to one or more of the companies mentioned in this market overview.

P&M Corporate Finance, LLC, and/or the analysts who prepared this market update, may own securities of one or more of the companies mentioned in this market overview.

The information provided in this market overview was obtained from sources believed to be reliable, but its accuracy cannot be guaranteed. It is not to be construed as legal, accounting, financial, or investment advice. Information, opinions, and estimates reflect P&M Corporate Finance, LLC’s judgment as of the date of publication and are subject to change without notice.

P&M Corporate Finance, LLC undertakes no obligation to notify any recipient

of this market overview of any such change.

The charts and graphs used in this market overview have been compiled by

P&M Corporate Finance, LLC solely for illustrative purposes. All charts are as

of the date of issuance of this market overview, unless otherwise noted.

The PMCF Plastics Index may not be inclusive of all companies in the plastics

industry and is not a composite index of the plastic industry sector returns.

Index and sector returns are past performance which is not an indicator of

future results.

This market overview is not directed to, or intended for distribution to, any

person in any jurisdiction where such distribution would be contrary to law or

regulation, or which would subject P&M Corporate Finance, LLC to licensing

or registration requirements in such jurisdiction.

Suite 425Two Towne SquareSouthfield, MI 48076

NOTABLE AWARDS FOR PMCF:

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Documents

Plastics & Packaging - pmcf.compackaging subsidiaries include Yorker Packaging, a manufacturer of injection molded specialty caps and closures, and WNA Inc., a lead-ing producer of