Private equity group SVPGlobal will combine its packaging firms Kloeckner Pentaplast and Linpac to increase their clout ahead of a planned stock market listing.
SVP put UK-based Linpac up for sale last year, but after failing to find a buyer at its asking price has opted to merge it with Germany’s Kloeckner Pentaplast.
Kloeckner Pentaplast said on Friday it would buy Linpac, creating a rigid and flexible film maker with combined annual revenue of more than $2 billion employing 6,300 people in 16 countries.
Kloeckner filed for an initial public offering in December in the United States, where many of its peers – including Polyone (POL.N), Sealed Air (SEE.N), Berry (BERY.N), Bemis (BMS.N) and Ball (BLL.N) – are listed.
The acquisition of Linpac is now expected to delay Kloeckner’s plans to list on the stock exchange before mid-year, people close to the matter said.
Kloeckner Pentaplast last year posted adjusted earnings before interest, tax, depreciation and amortization (EBITDA) of $243 million, while Linpac earned 60 million euros ($64 million).
At the current average earnings multiple of peers, the combined group would fetch a valuation of $2.8 billion.
SVP acquired Kloeckner Pentaplast from private equity firm Blackstone following a lengthy restructuring.
Blackstone had bought the company from Cinven in 2007, backed by 1.25 billion euros of leveraged loans.
The buyout group took control of Linpac in late 2014 after buying up large chunks of debt related to a 2003 takeover of Linpac by private equity group Montagu for 860 million pounds ($1.1 billion), which had been backed by a 600 million pounds loan.
Founded in 1965 as a unit of steel and machinery group Kloeckner-Werke, Kloeckner Pentaplast makes packaging for pharmaceutical, food and electronics goods, as well as pipe insulation and other plastics products.
Linpac makes plastic boxes, trays and films for vegetables, meat, cake and frozen food.