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Top News in PLASTICS AND PACKAGING

M&A Quarterly

For additional information or inquiries, please contact one of our team members:

www.pmcf.com

PLASTICS & PACKAGING FIRST QUARTER 2015

John D. Hart 248.223.3468 [email protected]

Matt G. Jamison 248.223.3368 [email protected]

Ryan R. Shuchman 248.603.5372 [email protected]

Scott S. Rohlig 248.603.5232 [email protected]

Erik K. Wittbold 248.603.5397 [email protected]

About PMCF

P&M Corporate Finance (“PMCF”) is an investment bank-ing firm, focused exclusively on middle market transac-tions, with professionals in Chicago, Detroit, and across the globe through Corporate Finance International asso-ciates. Our dedicated Plastics and Packaging Group has deep industry knowledge and covers a wide range of pro-cesses including thermoforming, sheet and film extru-sion, blow molding, injection molding, and resin and color compounding. Offering a breadth of advisory services, the Plastics and Packaging Group has helped clients world-wide meet their sale, acquisition, financing, and strategic growth objectives.

Investment Banking Services:

• Mergers & Acquisitions

• Sales & Divestitures

• Capital Raising

• Sale Planning

has acquired

PMCF Transaction Announcements

Packaging: Food and HealthcareBlow and Injection Molding

Company Sale toFinancial Buyer

Packaging: Health and BeautyInjection Molding and Metalizing

Company Sale toInternational Buyer

has been acquired by

Packaging: FoodInjection Molding and Decorating

Strategic Acquisition Advisory

JOHN HART Managing Director [email protected]

RYAN SHUCHMAN Vice President 248.603.5372 [email protected]

pmcf.com

M&A Quarterly – Plastics & Packaging

2

Following the flurry of plastics and packaging M&A in Q4 2014, to-taling 101 transactions, Q1 ‘15 transaction volume not surprisingly reflected a more normalized trend. When reviewing Q1 ’15 deal vol-ume, of 80 transactions, the level was in line with the quarterly average of 80+ deals that have occurred in the last two years. The healthy level of M&A activity was supported by continued private equity interest, at 27 transactions, while strategic buyers also re-mained acquisitive with 53 deals through Q1 ’15.

With sustained volume near recent quarterly averages, the first quarter of 2015 marks a strong start for plastics and packaging M&A this year and an extension of the positive transaction environ-ment. This is encouraging as 2014 was largely considered the most active year for global M&A since 2007, driven by strong balance sheets, low-cost debt, and steady organic growth, factors which may continue through 2015. We believe that the plastics and pack-aging sector will likely remain a focus for strategic and financial buyers given these robust market conditions.

Key Q1 2015 plastics and packaging M&A trends included the following:

• Despite experiencing a larger year-over-year decline in deal activity, strategic buyers re-mained the most acquisitive buyer segment, accounting for approximately 66% of first quarter transactions, while private equity firms completed 14 and 13 add-on and plat-form acquisitions, respectively

• Deal activity was flat or down across all major processing types through Q1 ’15; however, transaction mix shifted as deals involving injection molders and film manufacturers both became larger percentages of overall volume

• Packaging deals, including rigid, flexible, bottles, and closures, increased to account for over a third of overall plastics & packaging M&A in the first quarter of 2015, after totaling less than a quarter of Q1 ’14 deals

• Stock market valuations increased significantly for publicly traded plastics businesses in Q1 ’15, with average EV/EBITDA multiples up over a full turn, potentially reflecting a continuation of attractive valuations for sellers

Key transactions for the quarter included the following:

• Multi-billion dollar merger between MeadWestvaco (NYSE:MWV), which has a significant plastic packaging business, and Rock-Tenn Inc. (NYSE:RKT)

• A. Schulman Inc.’s (NasdaqGS:SHLM) acquisition of Citadel Plastics from private equity firm HGGC for $800 million at an estimated 10.7x EBITDA

• Private equity firm The Gores Group’s acquisition of automotive injection molder U.S. Farathane Corp.

• Myers Industries Inc. (NYSE:MYE) sale of its lawn and garden business to private equity firm Wingate Partners for $115 million

• Schweiter Technologies AG’s (SWX:SWTQ) acquisition of plastic sheet manufacturer Polycasa NV for $137 million

The plastics and packaging industry has supported robust levels of M&A over the past decade, with 300+ transactions in each of the last 8 years. With positive macroeconomic trends driving a healthy global M&A market, current activity in the plastics and packaging sector remains constrained in large part by scarce, quality acquisition targets. The com-bination of these factors has created ahones seller’s market which owners considering a sale should carefully evaluate. Those plan-ning longer-term exits should strategically plan for a hold period, and the execution of value-creating business improvements, with timing through the next business cycle.

Strategic Financial Add-On Financial Platform

220

55

72

347

235

68

79

382

213

56

59

328

64

1414

92

266

60

67

393

0

50

100

150

200

250

300

400

350

20142010 Q1 YTD ‘142011 2012 2013

Num

ber

of D

eals

233

49

59

341

53

141380

Q1 YTD ‘15

First Quarter 2015 Market Summary & Outlook

Q1 YTD 2015

Q1 YTD 2014

Flexible

Rigid Packaging

7%

Industrial15%

Closures 2%Bottles 7%

Resin18%

Custom Molding36%

Building Products 5%

FlexiblePackaging

9%

Consumer 1%

Sector‘14 – ’15

Change

Injection Molding

Blow Molding

Film

Resin/Color & Compounding

Sheet & Thermoforming

Specialty

Total

201322

86

60

68

38

54

328

22

95

63

72

23

66

341

8

27

13

19

7

18

92

9%

29%

14%

21%

8%

19%

100%

8

25

13

15

5

14

80

10%

31%

16%

19%

6%

18%

100%

% of Total

% of Total2014

% Change

Q1 YTD‘15

Q1 YTD‘14

0

-2

0

-4

-2

-4

-12

0%

-7%

0%

-21%

-29%

-22%

-13%

Source: P&M Corporate Finance, Company Reports

Flexible

Rigid Packaging

6%

Industrial19%

Consumer1%

Bottles7%

Resin14%

BuildingProducts

3%

FlexiblePackaging

15%Custom Molding

29%

Closures6%

Transactions by Product Segment


PMCF

3

Global Plastic Packaging M&A

Trends in M&A:

• Overall plastic packaging transactions increased by 6 deals through Q1 ‘15, or 27%, compared with M&A activity through the previous year’s first quarter, driven by an increase in both financial and strategic acquisitions

• Flexible packaging deals have accounted for the majority of the comparatively higher Q1 ’15 transaction volume, as the sector ac-counted for 43% of total transactions with its activity up by 50% from Q1 ‘14 levels

• Food & beverage remained the most active end market for plastic packaging M&A through Q1 ‘15, while the consumer segment, up almost 3 fold from the prior period, has experienced the largest year-over-year increase

Transactions by Buyer Type Transactions by End Market

0

20

40

60

80

100

120

140

65

53

118

Q1 YTD ‘14

66

48

114

2014

71

47

118

Q1 YTD ‘15

148

22

2011

56

43

2012

17

1128

2013Strategic Financial

Num

ber

of D

eals 99

Food and Beverage

Industrial

Consumer

Construction

Medical

Automotive

Transportation

Electronics

Total

11

5

3

-

3

-

-

-

22

14

1

8

-

5

-

-

-

28

Q1 YTD ‘15Q1 YTD ‘14

Featured Sector Transactions

January 2015 – MeadWestvaco Corp. (NYSE:MWV) and Rock-Tenn Inc. (NYSE:RKT) have agreed to merge, with the combined entity set to generate approximately $16 billion in 2015 revenues. While both companies primarily operate in the paper packag-ing industry, MWV also has a significant plastic packaging business through its subsidiary MeadWestvaco Calmar Inc., which engages in the production of injection molded pump and spray systems. MWV first entered into the dispensing systems market in 2006 with the $710 million acquisition of Saint-Gobain Calmar. Subsequently, MWV also acquired Keltic Dispensing Systems in 2007 and Polytop Corporation in 2012. Plastic packaging revenue today is believed to total over $500 million.

February 2015 – RPC Group Plc (LSE:RPC), a global leader in plastic packaging headquartered in the U.K., has acquired Neth-erlands-based bottle producer PET Power BV. PET Power employs over 200 and manufactures blow molded plastic packaging products for the pharmaceutical, cosmetic, and food industries. The acquisition, which brings together two of the major players in the European packaging market, is in line with RPC Group’s strategic initiative to invest and grow in the PET sector. The com-pany also recently acquired Promens Group AS, a Kopavogur, Iceland-based plastics converter with 41 manufacturing plants in Europe, North America, Asia, and Africa.

Flexible

Public Acquirer

37%

Private Acquirer

27%

PE to PE9%

Private Equity(PE)27%

Public Acquirer

47%

Private Acquirer

14%


RigidFlexibleBottlingCaps & Closures

Total

6862

22

27%37%27%9%100%

# % Packaging # % Packaging5

1265

28

18%43%21%18%100%


Q1 YTD ‘14 Q1 YTD ‘15

Buyer Type

Packaging Transaction Detail

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

pmcf.com


4

Global Injection Molding M&A

Trends in M&A:• Transactions involving injection molders fell by 7% in Q1 ‘15, or two deals, versus Q1 ‘14, driven in part by declining activity in the

consumer and electronics sectors

• A declining number of injection molding transactions completed by financial buyers, down 56% through Q1 ‘15, also contributed to reduced activity in the space

• From a cross-border perspective, the amount of foreign injection molders acquired in the first quarter of 2015 mirrored the Q1 ‘14 mark of 16 transactions, while the volume of U.S. injection molders acquired in the period fell by 18%

Featured Sector Transactions • January 2015 – Los Angeles, CA-based private equity firm The Gores Group completed an acquisition of injection molder U.S.

Farathane Corp. U.S. Farathane, which is headquartered in Auburn Hills, MI, supplies injection molded components to an au-tomotive customer base that includes Ford Motor Co. and General Motors. The Company operates 225 injection molding presses via 10 manufacturing facilities throughout the United States and reported sales of $402 million in 2013. U.S. Farathane CEO Andy Greenlee cited plans to seek acquisitive growth and global footprint expansion with the help of their new private equity partners.

• January 2015 – Akron, Ohio-based diversified manufacturer Myers Industries Inc. (NYSE:MYE) sold its lawn and garden busi-ness to private equity firm Wingate Partners for $115 million. Myers’ lawn and garden segment primarily engages in the manu-facturing of injection molded pots, planters, and related gardening equipment. Myers, which announced its plan to sell the non-strategic lawn and garden business last June, cited plans to focus on growing core platforms such as material handling and distribution as its motivation for the sale. Proceeds from the sale will also help Myers pay down debt, including financing from the $157 million acquisition of Scepter Corp. in 2014.

Q1 YTD ‘14 Q1 YTD ‘15

Buyer Type

Public Acquirer

37%

Private Acquirer

30%

Private Equity(PE)33% Flexible Public

Acquirer52%Private

Acquirer36%


U.S.-to-U.S.

U.S.-to-Foreign

Foreign-to-U.S.

Foreign

Total

Distressed

9

1

-

15

25

-

8

2

3

14

27

-


Sector Deal Statistics



0

20

40

60

80

100

120

58

52

110

Q1 YTD ‘14

67

39

106

2014

57

29

86

Q1 YTD ‘15

189

27

2011

68

27

95

2012

214

25

2013

Strategic Financial

Num

ber

of D

eals

Food and Beverage

Industrial

Consumer

Construction

Medical

Automotive

Transportation

Electronics

Total

2

3

6

-

3

7

1

5

27

2

1

3

1

8

10

-

-

25



PMCF

5

Global Film M&A

Trends in M&A:• Plastic film M&A activity remained flat during Q1 ’15, as compared to Q1 ‘14, recording 13 transactions in each period while the

distribution of deals showed slightly higher consumer and medical end market activity• Financial buyers accounted for 54% of the film deals completed in Q1 ‘15, more than doubling their percentage of Q1 ‘14 transac-

tions, while the level of total deals completed by strategic buyers fell from 77% to 46% • Acquisitions involving U.S. film manufacturers declined by 50% in Q1 ’15, versus Q1 ’14, while a 43% increase in foreign sector

transactions kept overall film M&A flat through the quarter

Q1 YTD ‘14 Q1 YTD ‘15Buyer Type

Flexible Public

Acquirer31%

Private

Acquirer46%


PE to PE8%

Flexible

Public

Acquirer15%

Private

Acquirer31%


U.S.-to-U.S.

U.S.-to-Foreign

Foreign-to-U.S.

Foreign

Total

Distressed

4

-

2

7

13

-

Q1 YTD ‘14

3

1

-

9

13

-

Q1 YTD ‘15




Food and Beverage

Industrial

Consumer

Construction

Medical

Automotive

Transportation

Electronics

Total

6

2

3

-

2

-

-

-

13

Q1 YTD ‘15

5

6

1

-

1

-

-

-

13

Q1 YTD ‘14

Featured Sector Transactions • February 2015 – Tekni-Plex Inc., owned by New York-based private investment firm American Securities, announced it has

agreed to acquire the pharmaceutical blister film and adhesive tape substrate film businesses of Italian film producer Galla-zzi SpA. Tekni-Plex purchased the business units through its European subsidiary, Tekni-Plex Europe NV, with the intent to strengthen its European product portfolio. Paul Young, CEO of Wayne, NJ-based Tekni-Plex, noted, “Gallazzi’s manufacturing capabilities and product offerings are an excellent complement to our global Tekni-Films business.”

• March 2015 – Global packaging conglomerate Amcor Ltd (ASX:AMC), headquartered in Australia, announced it has purchased the flexible packaging division of South African packaging company Nampak Holdings. The $22 million deal will make Amcor the largest producer of flexible packaging in South Africa, and provide a platform for further expansion into the region. The Nampak Flexibles division includes three manufacturing plants throughout South Africa with combined extrusion, lamination, and conversion capabilities. In addition to the flexibles unit, Nampak has also completed dispositions of its corrugated, tissue, and recycling businesses within the last year. Nampak stated plans to pursue growth in higher margin businesses as its basis for the sale of these units.

Strategic Financial

45

23

68

Q1 YTD ‘14

48

27

75

2014

41

19

60

Q1 YTD ‘15

103

13

2011

35

28

63

201267

13

2013

Num

ber

of D

eals

0

10

20

30

40

60

80

50

70

pmcf.com


6

Global Resin and Color & Compounding M&A

Trends in M&A:• Transaction volume among resin suppliers and color & compounders fell by 4 transactions, or 21%, year-over-year through the

first quarter of 2015 versus the first quarter of 2014• The number of sector deals completed by financial buyers remained flat in Q1 ‘15, while the number of strategic buyer transac-

tions fell 29% from Q1 ‘14 levels• Cross-border M&A involving U.S. companies was down significantly in the resin and color & compounding space, with 2 deals

being completed in Q1 ‘15 versus a Q1 ‘14 that included 5 cross-border transactions

Sector Detail Q1 YTD ‘14

Flexible

Color &Compounding

37%

Resin Supplier63%

Flexible

Color &Compounding

27%

Resin Supplier73%

Sector Detail Q1 YTD ‘15

Q1 YTD ‘14 Q1 YTD ‘15Buyer Type

Flexible


Public Acquirer

42%

Private Acquirer

32%

PE to PE10%

Flexible Private Equity

(PE)20%

Public Acquirer

40%

Private Acquirer

27%

PE to PE13% U.S.-to-U.S.

U.S.-to-Foreign

Foreign-to-U.S.

Foreign

Total

Distressed

4

-

2

9

15

-

Q1 YTD ‘15

4

4

1

10

19

1

Q1 YTD ‘14



Transactions by Buyer Type

Featured Sector Transactions March 2015 – A. Schulman Inc. (NasdaqGS:SHLM), an international supplier of plastic compounds and resins, announced it has agreed to acquire Chicago, IL-based compounder and composites maker Citadel Plastics from private equity firm HGGC for $800 million. Citadel reported EBITDA of $75 million in 2014, reflecting an estimated multiple of 10.7x on the transaction. The company also had approximately $550 million of sales in 2014, supported by 1,200 employees and 21 manufacturing locations. Citadel represents A. Schulman’s 10th acquisition since 2009, expanding the company’s North American manufacturing foot-print and nearly doubling its sales in the region.

March 2015 – Switzerland-based specialty chemicals maker Sika AG (SWX:SIK) entered into an agreement with Axson SAS to acquire its epoxy and polyurethane polymer formulator business Axson Technologies. Based in Saint-Ouen, France, Axson Technologies serves a range of end markets including design, prototyping and tooling, structural adhesives, composite materi-als, and encapsulation products for the automotive, marine, renewable energy, sports & leisure, and construction markets. This transaction comes only months after Axson acquired Trentesaux-Brochier’s polyurethane business, creating the company Axson Merylith.

0

10

20

30

40

60

80

50

70

42

14

56

44

18

62

52

16

68

14

519

53

19

72

10

15

Strategic Financial2014 Q1 YTD ‘14 Q1 YTD ‘152011 2012 2013

5

Num

ber

of D

eals


PMCF

7

Global Sheet and Thermoforming M&A

Trends in M&A:• Deals involving sheet and thermoforming companies fell by 2 deals in Q1 ‘15, a decline of 29% compared to Q1 ‘14 levels

• Transaction mix shifted slightly in Q1 ‘15, with a transaction occurring in the automotive space that saw no Q1 ‘14 activity, and no deals being recorded in the consumer end market

• Publicly traded buyers accounted for all of the strategic sheet and thermoforming acquisitions that occurred in Q1 ‘15, while financial transactions were split between PE to PE trading and new private equity deals



Food and Beverage

Industrial

Consumer

Construction

Medical

Automotive

Transportation

Electronics

Total

1

3

1

-

-

-

2

-

7

Q1 YTD ‘14

1

1

-

-

-

1

2

-

5

Q1 YTD ‘15

U.S.-to-U.S.

U.S.-to-Foreign

Foreign-to-U.S.

Foreign

Total

Distressed

1

1

-

3

5

-

Q1 YTD ‘15

2

-

1

4

7

-

Q1 YTD ‘14

Sector Deal StatisticsQ1 YTD ‘14 Q1 YTD ‘15Buyer Type

Flexible Private Equity

(PE)43%

Public Acquirer

43%

Private Acquirer

14%

Flexible


Public Acquirer

60%

PE to PE20%

Featured Sector Transactions February 2015 – Geel, Belgium-based plastic sheet manufacturer Polycasa NV was acquired by Zurich, Switzerland-based Sch-weiter Technologies AG (SWX:SWTQ) for $137 million. Polycasa, formerly doing business as Quinn Plastics, employs more than 520 people across five manufacturing plants throughout Germany, Spain, Slovakia, the Czech Republic, and Belgium. Polycasa, an operating subsidiary of British conglomerate Aventas Group, reported sales of $205.7 million in 2014. With this acquisition, Schweiter stated plans to leverage Polycasa’s capabilities to strengthen the display business of its existing 3A Composites division.

March 2015 – Heavy gauge thermoformer McClarin Plastics, based in Hanover, PA, announced it will merge with Blackford Capital portfolio company Amtech Corp. Based in Yakima, WA, Amtech manufactures composite-based products for military and com-mercial markets. Among its specialties are resin transfer molding and vacuum-assist RTM. The combined company will retain the name McClarin Plastics and will have roughly 500 employees spread across manufacturing facilities in Washington, Penn-sylvania, and Alabama. The merger will allow McClarin to better serve the entire U.S. market and is expected to boost annual sales above $75 million. Blackford Capital, Amtech’s private equity sponsor, has helped the company grow sales from $9 to $38 million since 2008 and will continue its involvement in the new entity.

0

5

10

15

20

25

30

40

35

21

11

32

20

12

32

22

16

38

43715

8

23

325

Num

ber

of D

eals


pmcf.com


8

Global Blow Molding M&A

Trends in M&A:• Global blow molding M&A deal volume remained flat in Q1 ‘15, with strategic buyers accounting for a slightly higher proportion of

deals versus Q1 ‘14 levels

• End market transaction mix fluctuated slightly year-over-year between Q1 ‘14 and Q1 ‘15, with medical and automotive end mar-kets each accounting for one Q1 ‘15 transaction, and industrial blow molding deals falling by three

• Cross-border M&A activity in the blow molding space remained non-existent, while the number of deals completed in the U.S. and abroad remained flat in Q1 ‘15 relative to the Q1 ‘14 results



Food and Beverage

Industrial

Consumer

Construction

Medical

Automotive

Transportation

Electronics

Total

3

-

3

-

1

1

-

-

8

Q1 YTD ‘15

3

3

2

-

-

-

-

-

8

Q1 YTD ‘14

U.S.-to-U.S.

U.S.-to-Foreign

Foreign-to-U.S.

Foreign

Total

Distressed

3

-

-

5

8

1

Q1 YTD ‘15

3

-

-

5

8

2

Q1 YTD ‘14

Sector Deal StatisticsQ1 YTD ‘14 Q1 YTD ‘15Buyer Type

Flexible


PE to PE25%

Private Acquirer

25%

Public Acquirer

25%

Flexible Private Equity(PE)25%

PE to PE12%

Public Acquirer

38%

Private Acquirer

25%

Featured Sector Transactions February 2015 – Chesterfield, MO-based rigid packaging manufacturer Pretium Packaging, a portfolio company of San Fran-cisco, CA-based private equity firm Genstar Capital, announced it has acquired Intertech Corp. Privately-held Intertech, based in Greensboro, NC, manufactures proprietary blow molded HDPE products and containers for a wide range of end markets, including specialty chemical, personal health care, institutional, household, automotive, and agricultural. Acquiring Intertech marks the second transaction in 3 months for Pretium, who acquired Hillsborough, NJ-based blow molder Tri-Delta Plastics in December 2014. Pretium CEO George Abd, commenting on the transaction, noted that Pretium continues to seek strategic ac-quisitions in the space.

January 2015 – Leeds, England-based blow molder Esterform Packaging Ltd has acquired Constar UK, a former subsidiary of Constar International Holdings. Constar UK, which is also based in Leeds, will provide an immediate boost to Esterform’s PET preform manufacturing capabilities. The move is projected to double Esterform’s PET preform capacity, allowing it to produce 3 billion units annually. Mark Tyne, founder of Esterform, commented on the acquisition by noting, “the two companies manufac-ture very similar products with a good deal of duplicate tooling, so it makes perfect sense to merge Constar into the Esterform group.”

0

5

10

15

20

25

30

35

11

11

22

4

4 8

5

38

10

8

18

15

15

30

Num

ber

of D

eals


12

10

22


PMCF

9

Additional Global Specialty Sector Activity

Trends in M&A:• Q1 ‘15 M&A activity involving specialty plastic process types, including rotational molding, foam, pipe & tube, profile extrusion,

and composites, experienced a slight decline in deal volume, down by four transactions in Q1 ‘15 relative to the first quarter of 2014

• The decline in specialty sector transaction volume was driven by lower levels of activity in the consumer and construction end markets, combining for just 3 deals through Q1 ‘15, a 67% decrease from the combined 9 deals completed in Q1 ‘14

• Strategic buyers continue to represent the most active acquirers across specialty sectors, accounting for 57% of the Q1 ‘15 total, even as the number of deals completed by strategic buyers fell from 14 to 8 compared with Q1 ’14 activity

FEATURED SECTOR TRANSACTIONSPipe & TubeFebruary 2015 – Advanced Drainage Systems (NYSE:WMS) significantly expanded its Canadian footprint via the acquisition of Ontario-based HDPE pipe producer Ideal Pipe Inc. ADS, headquartered in Hilliard, OH, paid approximately $44 million to acquire Ideal Pipe, reflecting a 7.3x transaction multiple on trailing twelve month EBITDA of $6.1 million. ADS, who previ-ously operated only two plants in Canada, acquired three additional Canadian manufacturing facilities in the transaction. Joe Chlapaty, ADS Chairman and CEO, noted, “Through the combination of our businesses, we will be able to pursue new and exciting opportunities in the Canadian market and offer our customers an unmatched breadth of water management products and solutions.”

ExtrusionMarch 2015 – VisiPak, a subsidiary of private investment firm Cameron Holding’s Sinclair & Rush Inc. platform, completed the acquisition of Marion, IN-based plastic packaging manufacturer Tulox Plastics Corp. Tulox, who extrudes clear plastic tubes, will relocate its manufacturing operations to VisiPak plants in St. Louis, MO and Carlstadt, NJ. VisiPak designs and produces clear plastic packaging through extrusion, thermoforming, injection molding, and other fabricating and decorating technolo-gies. The company’s products include clamshell packaging, clear plastic tubes, transparent boxes, blister packs, and plastic trays.

Engineered FoamMarch 2015 – Armacell, a global leader in flexible insulation and engineered foams based in Germany, announced it has agreed to acquire Industrial Thermo Polymers Limited through its subsidiary Armacell International. ITP is a leading Canadian-based manufacturer of extruded polyethylene insulation products. The transaction represents the second add-on acquisition com-pleted by Armacell since being acquired by London private equity firm Charterhouse Capital Partners in 2013.

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


Food and Beverage

Industrial

Consumer

Construction

Medical

Automotive

Transportation

Electronics

Total

1

6

4

5

1

-

1

-

18

Q1 YTD ‘14

2

8

1

2

-

-

1

-

14

Q1 YTD ‘15

0

10

20

30

40

50

60

70

90

80

28

32

60 27

53

80

30

24

54

50

16

66

144

18

86

14

Num

ber

of D

eals

Q1 YTD ‘142014 Q1 YTD ‘152011 2012 2013Strategic Financial

pmcf.com


10

PMCF Plastics & Packaging Index S&P 500 Index

Note: Chart highlights relative stock price return

Mar- 15Sep - 13 Dec - 13 Mar-14 Jun-14 Sep- 14 Dec - 14Jun - 13Mar-1390%

110%

130%

150%

170%

100%

120%

140%

160%

PMCF Plastics & Packaging Index

PMCF Plastics & Packaging Index Valuation

• The PMCF Plastics & Packaging Index slightly outperformed the S&P 500 Index from March ‘13 through ‘15, with a relative stock price return approximately 5% higher than its benchmark

• Stock market valuations increased significantly for publicly traded plastics businesses in Q1 ’15, with average EV/EBITDA mul-tiples up over a full turn from the previous quarter

Revenue MultipleAverageMedian

EBITDA MultipleAverageMedian

1.0x1.0x

8.4x8.2x

Q1 ‘15

1.2x1.1x

9.4x8.8x

1.1x1.1x

9.2x8.7x

Q1 ‘13

1.2x1.1x

9.5x8.8x

Q2 ‘13

1.2x1.1x

9.5x8.8x

Q3 ‘13 Q4 ‘13

1.2x1.2x

9.4x9.3x

1.2x1.2x

9.4x9.3x

Q1 ‘14

1.2x1.1x

9.3x9.0x

Q2 ‘14

1.4x1.3x

10.8x10.5x

Q3 ‘14 Q4 ‘14

Private Equity InvestmentsDollars in Billions

No. of Deals Disclosed Deal Value

Num

ber

of D

eals

0

Dea

l Val

ue ($

in B

illio

ns)

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

2,000 4,000 6,000 8,000

10,000 12,000 14,000 16,000 18,00020,000

2008

18,784

2009

11,531

2010

10,342

2011

14,315

2012

16,126

2013

18,133

2014

16,542

Q1 ‘14 Q1 ‘15

4,336 4,579

Deal Volume Capital Invested

Num

ber

of D

eals

$00

Dea

l Val

ue ($

in B

illio

ns)

2008 2009

2,955

2010

2,382

2012

1,605

2014

2,350

Q1 ‘14

2,529

Q1 ‘15

2,997 2,947

$200

$400

$600

$800

$1,000

$1,200

$1,400

500

1,000

1,500

2,000

2,500

3,000

3,500

851634

2011 2013

• Average deal size in the U.S. middle market decreased in Q1 ’15, relative to Q1 ’14, with total deal value falling despite an over 5% increase in transaction volume

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

U.S. M&A Activity — Deals < $500M

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

Source: Capital IQ, Pitchbook, and PMCF Estimates

Note: Multiples based on most recent data available as of printingSource: Capital IQ

*Includes all disclosed transaction with at least one U.S. party

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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.

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Notable Awards for PMCF:

2013 IndustrialManufacturing/Distribu tion

Deal of the Year

Documents

Top News in PLASTICS AND PACKAGING - · PDF fileTop News in PLASTICS AND PACKAGING ... • Flexible packaging deals have accounted for the majority of the comparatively ... in the