Deal in focus: Gilde backs pack2pack MBO

A recent string of deals shows that, as growth has slowed in Europe – with zero GDP growth for the eurozone in Q2 – private equity firms in the Benelux region have begun to look more closely at the opportunities arising from corporate spin-offs.

GEM is carving out pack2pack Halsteren from the pack2pack group, which is owned by Ohio-headquartered Greif International, an industrial packaging and bulk container manufacturer. Greif acquired pack2pack in August 2011 through its EarthMinded Life Cycle Services subsidiary.

"We have known pack2pack and its management for some time, knowing the business was non-core to Greif," says GEM partner Jeroen Nienhaus.

Greif launched its sale process for the division in the spring, hiring Dutch corporate finance firm Imap DB&S. "Based on our relationship with management and knowledge of the business, we were able to manoeuvre ourselves into a preferred buyer position," says Nienhaus.

Across Europe, divisions are being sold by corporates for several reasons, be it parent companies on the brink of collapse or simply a shedding of non-core assets. In July, Bencis Capital Partners acquired Morubel, a Belgian frozen shrimp supplier that had broken away from its former parent Heiploeg and begun trading as an independent company earlier this year after Heiploeg's Dutch activities went bankrupt.

Likewise, Blackstone acquired the Luxembourg-based Lombard International Assurance and Lombard Insurance Development Holdings divisions from Friends Life Group for a total of €399m.

Another key player in this area of the market is Netherlands-based Vion Food Group, which has been shedding assets consistently over the last 18 months, including the sale of its Oerlemans Foods division to H2 Equity Partners in March this year. Vion, like many other large corporates across Europe, has an ongoing strategy to divest its non-core assets.

Package deal
Following its carve-out, pack2pack Halsteren will operate independently under the name pack2pack. The deal was structured as a management buyout and sees ING Bank provide a debt package.

Founded in 1942 as Plamentha, the pack2pack group as a whole employs 650 staff and generates revenues of €130m. Its Halsteren division employs 100 staff and generates around €28m in turnover.

pack2pack Halsteren manufactures pails and tin cans, predominantly for the food and paint industries. "pack2pack holds a good market position in the Benelux region, providing a solid base and strong cash generation capacity," says Nienhaus. "We see room to build on this position and grow the business outside its home turf of Benelux."

The business has had links with private equity for several years. It was acquired by Blagden Industries in 1973, whose packaging division was then bought by Bridgepoint and CVC in June 1998 for around €163.6m.

Alchemy Partners then acquired Blagden Packaging in a secondary buyout in March 2004, with the value of the deal believed to sit at around €120m. Bank of Scotland arranged senior debt facilities for the transaction.

In November 2006, Alchemy sold Blagden's packaging division to Greif, achieving a 2.9x money multiple and 52% IRR, according to unquote" data.

Blagden's reconditioning activities were renamed pack2pack and acquired by Towerbrook Capital Partners in March 2008. The firm provided an equity ticket of €150m in exchange for a majority stake. pack2pack's management team invested alongside Towerbrook.

In August 2011, Towerbrook sold pack2pack to Greif subsidiary EarthMinded Life Cycle Services.

People
Chris Paelinck is the CEO of pack2pack. GEM partner Jeroen Nienhaus, managing partner Remko Jager and associate David van Hasselt worked on the deal for the firm. Jager will join the company's supervisory board in a non-executive role.

Advisers
Equity – DRV Corporate Finance, Marco du Pré, Pieter Poortvliet (Corporate finance); Accuracy, Leontine Koens-Betz (Financial due diligence); Simmons & Simmons, Leo Verhoeff, Pieter de Visser, Robbert Jansen, Oscar Hoefnagels (Legal); JSA (Tax).
Vendor – Imap DB&S, Axel Fuhri Snethlage, Jan-Pieter Borst, Cees van Vliet (Corporate finance); Allen & Overy, Katinka Middelkoop, Aafke Landsmeer, Rens Bondrager (Legal).

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Send to  

• Topics
• Benelux
• Buyouts
• Industrials
• Deal in focus
• Netherlands
• Gilde Equity Management Benelux
• Top story