U.S. packaging group Westrock (WRK.N) has put a unit making soap dispensers and perfume sprayers up for sale in a potential $1 billion deal, as it seeks to streamline its portfolio after a recent merger, three people close to the matter said.
Westrock is working with Lazard (LAZ.N) on the sale process, which has already advanced to the second round, the people said, adding final bids from buyout groups including Onex (ONEX.TO), Advent, Bain, CD&R, as well as British packaging group RPC (RPC.L), were expected by a mid-December deadline.
The Westrock unit – dubbed a home, health and beauty business – posted earnings before interest, taxes, depreciation and amortization (EBITDA) of about $110 million in its last fiscal year on sales of $567 million.
The bidders are expected to value the unit at up to 10 times EBITDA, roughly in line with the valuation of listed peers such as Bemis (BMS.N), Sealed Air (SEE.N) and Sonoco (SON.N).
“WestRock is evaluating a wide range of strategic options for our home, health and beauty business,” a Westrock spokesman said, while Lazard and the bidders declined to comment or were not immediately available for comment.
On its fiscal fourth-quarter earnings call earlier this month, WestRock CEO Steve Voorhees said alternatives included the potential sale of the business during the first half of calendar 2017.
Westrock, the second-largest U.S. packaging company behind International Paper (IP.N), was created last year by the $16 billion merger of MeadWestvaco and Rock-Tenn. The Westrock unit which is now up for sale was originally called Calmar and acquired by MeadWestvaco from Saint-Gobain (SGOB.PA) in 2006 for $745 million.
The sale is happening alongside the auction of another large cosmetics packaging business: private equity-owned French group Albea.
“The bidders in both processes are more or less the same. And some of them will want to combine the assets,” one of the people said.