M&A activity for North American based target companies in the packaging & printing sector for Q2 2016 included 39 closed deals, according to data published by industry data tracker FactSetThe average transaction value was $22.5 million.
One of the largest international transactions of the quarter was announced at the end of May when CVC Capital Partners announced that it signed a binding agreement to acquire ÅR Packaging Group AB. Under the terms of the transaction, CVC will acquire 100% of the company from its current owners, Ahlstrom Capital and Accent Equity. AR Packaging is one of Europe’s leading packaging companies with sales of approximately 560 million EUROS.
US demand for corrugated and paperboard boxes is forecast to grow 2.6% per year, reaching a value of more than $41 billion by 2020, according to an April 2016 report by The Freedonia Group. While market maturity and increased use of competing packaging materials are expected to limit volume growth, box manufacturers are responding by offering higher-margin, value-added products, including high-quality printing, easy-open tear strips, and special coatings. Corrugated box demand is forecast to rise 3% per year through 2020 amid demand related to e-commerce and rising use of shipping containers that double as retail displays. Folding carton demand is expected to post slower annual growth of 1.5% amid increased competition from flexible packaging such as stand-up pouches. However, pharmaceutical demand and the environmental benefit of folding cartons relative to plastic and foam restaurant containers should help sustain moderate growth.
Industry Indicators
- US nondurable goods manufacturers’ shipments of paper products, an indicator of converted paper product demand, rose 0.7% year-to-date in May 2016 compared to the same period in 2015.
- US nondurable goods manufacturers’ shipments of printed goods, an indicator of demand for commercial printing, rose 1.4% year-to-date in May 2016 compared to the same period in 2015.
Posted by Anthony Contaldo.
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