London-based packaging firm DS Smith has agreed to sell its plastics division to Olympus Partners at an enterprise value of $585 million. DS Smith reported in December 2018 that it was exploring options for its plastics division including a potential sale. The valuation multiple for this transaction appears below.
DS Smith Plastics is one of four divisions of DS Smith, a provider of corrugated and plastics packaging for consumer and industrial goods supported by paper and recycling operations, that employs more than 24,000 people worldwide with a headquarters in London, UK (www.dssmith.com).
DS Smith Plastics manufactures flexible packaging and dispensing products, rigid packaging & containers, and foam products. The company’s products are used in packaging and distribution applications in the retail and e-commerce, transit packaging, food & beverage, construction, graphics, protective packaging, recycling, automotive, and pharmaceutical sectors.
DS Smith Plastics operates from 26 sites (11 flexible packaging production plants and 15 rigid packaging manufacturing plants) in 16 countries and is headquartered near Chicago in Romeoville, IL (www.dssmith-plastics.com).
The enterprise valuation of $585 million represents a multiple of 9.9x TTM EBITDA through October 2018. Annual revenues for the plastics division are approximately $420 million.
“I am delighted to confirm that we have reached an agreement for the sale of our plastics division,” said Miles Roberts, group chief executive. “The transaction is attractive both financially and strategically for DS Smith. My colleagues in the plastics division have worked hard to build the business into the success that it is today, and that quality has been recognized by Olympus Partners.
Olympus Partners provides equity capital for middle market management buyouts and for companies needing capital for expansion. The firm invests in a wide array of industries but has specific expertise in business services; logistics and transportation; healthcare manufacturing and services; financial services; consumer and restaurant; and general industrial and packaging. In December 2017, Olympus held a final closing of its seventh institutional private equity fund, Olympus Growth Fund VII LP, with an oversubscribed $3 billion of capital commitments. The firm was founded in 1988 and is based in Stamford, CT (www.olympuspartners.com).
Closing of this transaction is expected in the second half of 2019.
© 2019 Private Equity Professional | March 7, 2019
