Silgan to buy WestRock Co's specialty closures and dispensing systems business for $1.05 bn
24 January 2017
US consumer goods packaging company Silgan Holdings yesterday struck a deal to buy WestRock Co's specialty closures and dispensing systems business for about $1.05 billion.
The unit is a leading global supplier of highly-engineered triggers, pumps, sprayers and dispensing closure solutions to major branded consumer goods product companies in the home, health and beauty markets.
The unit, which has 13 plants in North America, Europe, South America and Asia, generated $566 million in revenue in the year ended 30 September.
Silgan, based in Connecticut, expects to initially fund the acquisition through a combination of cash on hand and borrowings under its senior secured credit facility, including a committed incremental term loan.
Silgan expects to realize operational cost synergies of $15 million within 24 months post closing primarily through reductions in general and administrative expenses, procurement savings and manufacturing efficiencies.
The deal will expand Silgan position in the global closure market to include highly engineered dispensing systems for food, beverage, health care, garden, home and beauty products, in addition to Silgan's current offerings in hotfill vacuum closures and coldfill closures.
''This acquisition significantly enhances the scope and breadth of our market leading closure franchise by bringing new capabilities in the highly engineered dispensing systems category,'' said Tony Allott, Silgan's president and CEO.
''This business has a long history as a differentiated packaging franchise with deep customer relationships, a clear focus on the needs of its customers and markets and a strong track record for product innovation to meet these needs,'' he added.
Silgan is a leading manufacturer of rigid packaging for shelf-stable food and other consumer goods products with annual net sales of approximately $3.8 billion in 2015.
The company operates 88 manufacturing facilities in North and South America, Europe and Asia and is a leading supplier of metal containers in North America and Europe and a leading worldwide supplier of metal, composite and plastic closures for food and beverage products.
Silgan is also a leading supplier of plastic containers for shelf-stable food and personal care products in North America.