Olympus Closes Big Add-On to Liquibox
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Olympus Closes Big Add-On to Liquibox

Liquibox, a maker of liquid packaging products and a portfolio company of Olympus Partners, has closed the buy of the plastics division of DS Smith, for $583 million.

The plastics division (PD) of DS Smith, headquartered near Chicago in Romeoville, Illinois, is a provider of flexible packaging and dispensing products; rigid packaging and containers, and foam products. In 2018, PD had total sales of $479 million.

Liquibox is a supplier of bag-in-box flexible packaging to the dairy, beverage and bulk food markets, and also produces pouches and rigid plastic water bottles. Bag-in-box packaging is primarily used in the foodservice industry to package dairy mix for milkshakes and coffee drinks, fountain beverage syrup and pumpable liquid foods such as food concentrates and sauces. Liquibox, founded in 1961, is headquartered in Richmond, Virginia and has 23 locations around the world. In 2018, Liquibox had revenues of $177 million.

The combination of Liquibox and PD has 35 manufacturing facilities and nearly 3,000 employees. With the close of the acquisition, PD’s flexible packaging and dispensing products will be branded and operate as part of Liquibox, while PD’s rigid businesses for extruded products, injection-molded products, and foam products will be split into three newly branded and independently operated businesses as, respectively, Corplex, DW Reusables and Engineered Foam Products.

This transaction was originally announced in March 2019 but was delayed due to anti-trust concerns in the United States. Earlier this month, Liquibox agreed with a proposal from the Justice Department to divest all of PD’s dairy, post-mix, smoothie, and wine bag-in-box product lines in the United States.

“Liquibox is a core holding for Olympus Partners. The PD acquisition is an important step in achieving our longer-term plan, and we plan to continue to invest in the business in support of its growth strategy,” said Manu Bettegowda, a partner at Olympus.

“We’re excited to complete this transformational acquisition and welcome the PD employees to our team,” said Ken Swanson, CEO of Liquibox. “The new structure and brand identity of these businesses further support our strategy and commitment to lead the way with sustainable packaging solutions. Our best-in-class converting and molding equipment, coupled with further advancements in materials and design will be a big benefit to our customers. We’re excited to unlock additional value through an expanded range of film, bag and dispensing fitments, our best-in-class filler solutions, and an expanded global reach.”

Olympus invests in a range of industries but has a specific interest in business services, food services, consumer products, healthcare services, financial services, industrial services and manufacturing. In December 2017, the firm 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, Connecticut.

MidCap Financial was the Joint Lead Arranger and Joint Bookrunner for a $605 million senior secured credit facility that supported Liquibox’s acquisition of the plastics division of DS Smith. MidCap’s deal team was led by Managing Director Puja Parekh. MidCap Financial, in alliance with its investment manager Apollo Capital Management, is a middle-market focused finance firm that provides debt instruments of $10 million to $750 million to companies across all industries.

London-based DS Smith (LSE: SMDS) is an international paper and plastic packaging business with more than $7 billion in annual revenues and 32,000 world-wide employees.

© 2020 Private Equity Professional | February 28, 2020

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