Warburg's Clondalkin sells specialist packaging division for $455m

Ellie Pullen
13 November 2014

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Warburg Pincus-backed Clondalkin Group, a Dutch manufacturer of packaging products, has sold its specialist division to UK plastic packaging supplier Essentra for $455m.

Essentra will finance the acquisition partly through an accelerated bookbuilding of up to 23.6 million shares, which represents 9.99% of the company's current issued share capital. The balance will be funded through existing facilities.

The acquisition is reportedly the largest in Essentra's history. According to the firm, the transaction is free of cash, debt, debt-equivalent items and tax assets valued at $20m.

Previous investment
Warburg acquired Clondalkin in February 2004 for €630m. The deal was a secondary buyout, with Warburg buying the business from Arle Capital Partners (then Candover) and Lehman Brothers. Arle realised an IRR twice its original investment through the sale, according to unquote" data.

Arle and Lehman had taken Clondalkin private in October 1999 for €540m. AIB Group and UBS Investment Bank provided debt for the deal, while Lehman provided a mezzanine facility and the company's management invested alongside the firms. At the time, the company was headquartered in Ireland.

Company
Founded in 1936 and headquartered in Amsterdam, Clondalkin is a manufacturer of packaging products for the pharmaceutical, healthcare, industrial, agricultural, horticultural, consumer goods, food and beverages sectors. Products include foils, laminates, sleeves, cartons and labels.

Its specialist packaging division operates 24 facilities across Europe and North America, manufacturing packaging products for the pharmaceutical, healthcare and personal care industries. Its product range includes folding carton packaging for cosmetics and toiletries, labels and leaflets.

Clondalkin's specialist packaging division employs 2,400 staff and generated EBITDA of $55.5m and EBIT of $37.2m on revenues of $428.9m last year. It is expecting revenues of $438m and an EBITDA of $58m for 2014.

People
David Lennon is the co-CEO of Clondalkin. Colin Day is the CEO of Essentra.

Advisers
Acquirer – Deutsche Bank (Corporate finance).
Company – Goldman Sachs (Corporate finance); Freshfields Bruckhaus Deringer (Legal).