Crown Holdings (CCK) Set To Buy Signode For $3.91 Billion
Zacks Investment Research | Dec 19, 2017 08:35PM ET
Consumer packaging company Crown Holdings, Inc. (NYSE:CCK) has agreed to acquire Signode Industrial Group Holdings (Bermuda) Ltd. — a unit of The Carlyle Group L.P. (NASDAQ:CG) — for $3.91 billion. This acquisition will strengthen Crown Holdings’ metal packaging business and significantly boost its free cash flow as well.
Why Signode?
Based in Glenview, IL, Signode operates in 40 countries with sales to customers in approximately 60 countries. This $2.4-billion company has 88 manufacturing facilities across six continents. Signode generated pro forma sales and adjusted EBITDA of $2.3 billion and $384 million, respectively, for the twelve-months ended Nov, 30.
The company boasts a diversified product offering offerings including strap, stretch and protective packaging consumables. Signode’s products secure and protect industrial and consumer goods during warehousing and shipment.
Benefits for Crown Holdings
The Signode acquisition will add a portfolio of premier transit and protective packaging franchises to Crown Holdings’ metal packaging business. Post buyout, Crown Holdings will be able to supply full solutions to meet customers' transit packaging needs utilizing Signode's products. In addition, Signode's geographic and product mix will provide Crown Holdings a solid platform for value-creating growth. Moreover, the buyout will broaden and diversify Crown Holdings’ customer base, facilitating growth in cash flow.
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