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SIG picking up Visy Cartons
Posted on Friday, 08 November 2019 08:22
Switzerland-based aseptic carton packaging maker SIG Combibloc has reached an agreement to acquire Australian peer Visy Cartons from VisyPak Operations.
Under the terms of the transaction, the buyer will pay AUD 70.00 million for the business, to be funded using cash on hand and existing credit facilities.
Completion is slated to follow during the fourth quarter of this year.
Following closing, Visy Cartons will become part of its new owner’s business in Asia-Pacific and will continue to be headed by general manager Adam Lipscomb.
The target’s profitability is expected to increase as a consequence of the takeover, due to factors relating to supply chain optimisation and the fact that it will have access to SIG’s new technologies.
SIG is also expected to benefit from the combination as it will be better placed to support its existing customer base in Asia, specifically those who have a presence in Australia or New Zealand through an investment or partnership.
The group noted that demand for premium milk imported to China from the two countries is expected to increase by a compound annual growth rate of about 7.0 per cent in the next five years, suggesting there will be an appetite for the firm’s aseptic carton technology.
SIG believes the product is the perfect packaging to be used in the export of liquid dairy products due to the long shelf life, efficient logistics and potential for differentiation offered.
Visy Cartons claims to be one of the leading players in the Australian beverage carton market.
The company operates from more than 120 sites across its home country, as well as in New Zealand and Thailand, and has a history dating back more than 70 years.
In fiscal year 2017/18, it produced 843,000 tonnes of fibre packaging, 545.00 million steel food cans and 1.70 billion beverage cans, among other items.
According to Zephyr, the M&A database published by Bureau van Dijk, the most valuable of the 101 deals targeting paperboard container manufacturers to have been announced worldwide in 2019 to date saw Paper Australia agree to pick up the Australian and New Zealand fibre-based packaging businesses of Orora for USD 1.15 billion last month.
© Zephus Ltd