Acquisition Further Broadens Closure Franchise into the Highly
Engineered Dispensing Systems Market
Investor Conference Call at 9:00 a.m. ET on January 23, 2017
STAMFORD, Conn.--(BUSINESS WIRE)--Jan. 23, 2017--
Silgan Holdings Inc. (NASDAQ:SLGN), a leading supplier of rigid
packaging for consumer goods products, announced today that it has
entered into a definitive agreement with WestRock Company (NYSE:WRK) to
acquire its specialty closures and dispensing systems business. This
business 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.
It operates a global network of 13 plants across North America, Europe,
South America and Asia. For the fiscal year-ended September 30, 2016,
this business generated sales of approximately $566 million.
“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 Chief Executive Officer. “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.
This acquisition allows us to further build relationships with common
global customers, provides significant opportunities for cost synergies,
creates an incremental platform for growth and strongly enhances our
free cash flow,” continued Mr. Allott. “We believe this business, like
Silgan, holds similar passions for excellence in customer support,
quality, safety and competitive franchise positions, while maintaining a
strong focus on returns and free cash flow,” concluded Mr. Allott.
The purchase price for this acquisition is $1.025 billion, subject to
adjustments outlined in the purchase agreement for this acquisition. The
transaction is subject to the satisfaction of certain customary
conditions and receipt of applicable regulatory approvals and is
expected to close late in the first quarter of 2017. Silgan expects to
initially fund the purchase price for this acquisition from a
combination of cash on hand and borrowings under the Company’s senior
secured credit facility, including a committed incremental term loan.
This acquisition is expected to be accretive to earnings, excluding the
impact of the required purchase accounting adjustments. The transaction
will become more accretive as synergies are phased in over the next 24
months following the closing.
Highlights of the transaction:
Market Focus: Following the acquisition, Silgan will expand its
leadership 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.
Synergies: Silgan expects to realize operational cost synergies
of $15 million within 24 months following the acquisition. These
synergies will be achieved primarily through reductions in general and
administrative expenses, procurement savings and manufacturing
Financial Impact: Silgan expects the transaction to be
accretive to earnings, excluding the impact of purchase accounting
adjustments, and significantly accretive to free cash flow per share
Financing: Pro forma for the transaction, Silgan’s net leverage
ratio under its credit facility will be approximately 4.3 times, which
is consistent with past levels following acquisitions. Silgan expects
to finance this transaction with debt at an attractive cost. Given its
pro forma free cash flow profile, Silgan expects its net leverage
ratio to return to its target range in the next 24 months.
Investor Conference Call Dial-In Information:
Silgan will hold an investor call today at 9:00 a.m. ET to discuss this
transaction. Given that Silgan will be issuing a press release with
regard to its year end earnings on January 31, 2017, after the U.S.
markets close, comments will be limited to the transaction. In order to
hear the audio for the conference call, you must dial the number listed
below at least 5 minutes before the conference call and reference the
listed pass code for the operator or automated response system.
Audio Dial-In Number:
U.S. and Canada – (877) 795-3638
International – (719) 325-4807
Pass Code: 6624695
Additionally, you should go to this link to view the slide presentation
for the conference call no more than 10 minutes prior to the start time.
You may click the following link directly or cut and paste the following
link into your browser:
For those unable to listen to the live conference call, a taped
rebroadcast will be available through February 2, 2017. To access the
rebroadcast, U.S. and Canadian callers should dial (888) 203-1112 and
international callers should dial (719) 457-0820. The pass code for the
rebroadcast is 6624695. To access the slide presentation for the
rebroadcast, you may click on the following link directly or cut and
paste the following link into your browser:
Silgan is a leading supplier of rigid packaging for consumer goods
products with annual net sales of approximately $3.8 billion in 2015.
Silgan operates 87 manufacturing facilities in North and South America,
Europe and Asia. Silgan 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. In
addition, Silgan is a leading supplier of plastic containers for
shelf-stable food and personal care products in North America.
Statements included in this press release which are not historical facts
are forward looking statements made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995 and
the Securities Exchange Act of 1934, as amended. Such forward looking
statements are made based upon management's expectations and beliefs
concerning future events impacting the Company and therefore involve a
number of uncertainties and risks, including, but not limited to, those
described in the Company's Annual Report on Form 10-K for 2015 and other
filings with the Securities and Exchange Commission. Therefore, the
actual results of operations or financial condition of the Company could
differ materially from those expressed or implied in such
View source version on businesswire.com: http://www.businesswire.com/news/home/20170123005496/en/
Source: Silgan Holdings Inc.
Silgan Holdings Inc.
Robert B. Lewis, 203-406-3160