KPS to buy Crown's EMEA tinplate packaging business

The deal is expected to close in Q3 2021.

Crown is to retain the remaining 20% stake in the business following the transaction. The company will receive gross proceeds of around €1.9bn, according to a statement.

The EMEA business has an enterprise value of €2.25bn, according to a statement from KPS.

KPS is currently deploying equity via KPS Special Situations Fund V. The fund held a final close on its $6bn hard-cap in October 2019. The vehicle invests in businesses based in Europe and the US with revenues of at least $250m, making equity investments of $250-750m. New York-headquartered KPS specialises in special situations investments, including corporate carve-outs, turnarounds and restructuring.

Barclays, Deutsche Bank, BNP Paribas, Credit Suisse and UBS have provided debt financing to back the deal, KPS said in a statement.

Unquote sister publication Mergermarket reported in December 2020 that Crown was carrying out a strategic review for its EMEA tinplate business, with sponsors including Apollo, Blackstone, Cinven, CVC and PAI Partners indicating interest in the business. The company was to be marketed based on EBITDA of $250m and was expected to generate a multiple in the 8-9x range.

Sponsors linked with the process in the later stages included KPS, as well as Lone Star and Onex, Mergermarket reported in March 2021. Potential trade buyers included US-based Sonoco, as well as Ball Metalpack, a portfolio company of Platinum Equity, according to the report.

Buyouts in the European containers and packaging sector peaked in aggregate value in 2019, when 25 deals totalling almost €9.4bn were completed, according to Unquote Data. Aggregate value dropped to just over €2bn in 2020, although 22 deals were completed, indicating a shift in activity towards small-cap deals, which held up better than large-cap transactions amid the pandemic.

In February 2021, Carlyle sold its stake in Portugal-based Logoplaste to Ontario Teachers' Pension Plan (OTPP) in a €1.4bn SBO. Aggregate deal value in the packaging sector for 2021 has already surpassed that of 2020, with nine deals totalling more than €2.3bn recorded to date, a figure that is set to rise to €4.5bn with KPS's acquisition of Crown's EMEA tinplate business.

A number of other exits and potential SBOs are on the cards in the sector for 2021, further indicating that activity in the market is returning. Active processes in the sector include Lindsay Goldberg's Austria-based Schur Flexibles, which the GP first attempted to sell in 2019, before reviving the process in March 2021, according to Mergermarket. CVC-backed AR Packaging, which is based in Sweden, is also up for sale, while Carlyle is also running a process to exit Everglass.

Company
Founded in 1892 and headquartered in Yardley, Pennsylvania, Crown produces packaging for consumer and industrial goods. Crown's EMEA tinplate division is headquartered in Baar, Switzerland, and produces tin-based products for food, aerosol and promotional packaging. The company employs 6,300 people across its 44 manufacturing facilities and generates revenues of around €2bn.

People
KPS Capital Partners – Michael Psaros (co-founder, co-managing partner).
Crown – Timothy Donahue (CEO).

Advisers
Equity – Rothschild & Co (corporate finance); Paul Weiss Rifkind Wharton & Garrison (legal); Barclays (corporate finance); UBS (corporate finance).
Vendor – Evercore (corporate finance).

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• Topics
• Buyouts
• DACH
• Industrials
• Carve-out
• Switzerland
• Unquote Data
• KPS Capital Partners