31 March 2017

Sealed Air signs asset sale deal with Bain Capital

Sealed Air has agreed to dispose of USD 3,200 million-worth of assets to Bain Capital, representing its largest divestment to date, according to Zephyr, the M&A database published by Bureau van Dijk. The seller is shedding its kitchen and workplace cleaning products division Diversey Care, held under Diversey Holdings (DH), as well as a part of its food hygiene business Food Care. The move came almost six years after Sealed Air splurged on the USD 4,300 million acquisition of DH, then owned by Clayton, Dubilier & Rice and the Johnson family.

Sealed Air had spent months scouting for potential suitors and was recently in talks with Henkel for the disposal of DH. Last year, the seller even considered demerging the unit, whose entire capital would have been owned directly by its shareholders if the transaction went ahead. With the agreement with Bain Capital now in place, Sealed Air hopes to streamline its business structure and free up resources for other growth initiatives, according to its press release. It also said it would repay debt and fund share buybacks with the proceeds.

Bain Capital expects to complete the acquisition by the end of this year, subject to approvals from the US Federal Trade Commission and the Department of Justice. Having obtained debt financing from banking giants including HSBC and Goldman Sachs, the private equity investor intends to merge both targets, which together yielded net sales of about USD 2,600 million last year and currently employ around 8,600 staff members worldwide. The combined entity will be named New Diversey, while the seller’s remaining businesses will be known as New Sealed Air following the transaction.

Commenting on the group’s future, Sealed Air chief executive Jerome Peribere said: “New Sealed Air, a leading provider of food, product and medical packaging solutions, will continue to focus on accelerating profitable growth and generating strong cash flow through end market opportunities and the global adoption of new products and solutions.”

Sealed Air’s latest venture was its purchase of Tampereen Teollisuussahko last year, as shown by data compiled by Zephyr. The Finnish company develops industrial cleaning-in-place systems that utilise remote monitoring technology and predictive analytics. According to Zephyr, Sealed Air’s other recently completed acquisitions targeted packaging maker B+Equipment, conveyor lubricant provider Dry Lube and Intellibot Robotics’ vacuum cleaning robot manufacturing business, which all took place in 2015. During the same year, Sealed Air disposed of its food packaging manufacturing facilities in the UK and Spain to R Faerch Plast.

© Zephyr