CHICAGO, Aug. 25 /PRNewswire-FirstCall/ -- U.S. Bancorp Piper Jaffray
(Piper Jaffray) today released Caps and Closures: A Mergers and Acquisitions
Review, written by Doug Lawson, vice president in Piper Jaffray's Middle
Market Mergers and Acquisitions (M&A) Group. In the report, Lawson provides
an overview of the caps and closures market, including trends, raw materials,
end markets and major participants. In addition, he reviews M&A value
drivers, transaction activity and valuation metrics.
Primarily produced from plastic or metal, caps and closures are typically
used to keep products fresh, prevent leakage and ensure safety. The caps and
closures market represents approximately 4.5 percent of the $420 billion
global packaging market. Lawson believes growth in the caps and closures
market is expected to exceed gross domestic product (GDP) growth as a result
of an increase in higher value-added packaging, continued conversion to
plastic from metal and glass and an increase in demand for single serve
According to Lawson, more than 100 firms participate in the fragmented
caps and closures market, although few have sales over $100 million. The top
five caps and closures producers account for approximately 33 percent of the
domestic market, with the next five accounting for approximately 16 percent.
"The caps and closures market is highly fragmented and offers substantial
opportunity for consolidation in coming years," said Lawson. "There have been
more than 40 mergers and acquisitions over the past few years in which all or
a portion of the target's business included caps and closures. Likely
acquirers in coming years are larger packaging companies that either already
have caps and closures operations or are seeking to diversify their packaging
In addition, Lawson believes private equity groups, many of whom have
significant capital to invest and like the dynamics of the packaging industry,
will be likely to pursue opportunities in the caps and closures market.
Valuations based on comparable companies and M&A transactions are in the range
of 5.5 to 7.5 times earnings before interest, taxes, depreciation and
Caps and Closures: A Mergers and Acquisitions Review is the latest in a
series of reports on the packaging industry distributed by Piper Jaffray's
Middle Market M&A Group. Others recent reports published by Doug Lawson and
the packaging team include:
-- Valuations in the Packaging Industry (May, 2003).
-- Packaging Industry Public Acquirers - Earnings per Share
Accretion/Dilution Considerations (March, 2003).
-- Mergers and Acquisitions: Value Drivers for Companies in the Packaging
Industry (February, 2003).
-- Mergers and Acquisitions Activity in the Packaging Industry - 2002 Year
in Review (February 2003).
In addition, in February of this year Piper Jaffray launched a monthly
packaging M&A newsletter. To subscribe to the newsletter or to receive a copy
of Caps and Closures: A Mergers and Acquisitions Review, or any of the
aforementioned reports, clients and members of the media should contact Dana
Wade at email@example.com or 415-277-1556.
U.S. Bancorp Piper Jaffray, a subsidiary of the consolidated group of U.S.
Bancorp (NYSE: USB), is a focused securities firm comprised of two revenue-
generating segments -- Capital Markets and Private Client Services. Clients
of both segments are supported by Investment Research, an independent group
reporting to the CEO. The firm provides a full range of investment products
and services to individuals, institutions and businesses. The firm has over
124 offices in 25 states across the country. U.S. Bancorp offers a
comprehensive range of financial solutions through U.S. Bank, U.S. Bancorp
Asset Management, U.S. Bancorp Investments and U.S. Bancorp Piper Jaffray. For
more information on U.S. Bancorp Piper Jaffray, visit www.piperjaffray.com .
SOURCE U.S. Bancorp Piper Jaffray