Apollo-backed Novolex, a manufacturer of food packaging products, has agreed to acquire Pactiv Evergreen in a take-private deal valued at $6.7 billion including debt, as demand for eco-friendly packaging rises.
The combined businesses will address consumer demand for convenient, reliable packaging, while expanding their manufacturing and distribution footprints across the US, Canada and Mexico. The new entity plans to invest in research to produce more recyclable, compostable and reusable packaging.
Funds managed by Apollo Global Management will finance the all-cash transaction alongside the Canada Pension Plan Investment Board (CPP Investments), which will provide around $1 billion and acquire a minority stake in the merged entity.
According to PitchBook’s Q3 2024 Launch Report: Food & Beverage Consumer Packaged Goods, companies in subsectors like beverages and shelf-stable food have been increasingly focused on providing sustainable and eco-friendly packaging solutions as consumers become more environmentally conscious.
The deal offers Pactiv Evergreen shareholders $18 per share, representing a 49% premium to the two-month weighted average trading price as of Dec. 2.
Pactiv Evergreen, which went public in September 2020, is a provider of food and beverage packaging solutions to customers including restaurants, foodservice distributors, retailers, food and beverage producers, packers, and processors.
Novolex, which operates 56 manufacturing facilities in North America and Europe, was acquired by Apollo in 2022 from The Carlyle Group for an estimated $6 billion. Carlyle retained a minority stake at that time.
Advisers for Novolex included Barclays as lead financial adviser and Paul, Weiss, Rifkind, Wharton & Garrison as legal counsel.
Financial advisers for Pactiv included Goldman Sachs and Lazard, while Paul Hastings served as legal counsel.
Featured image by Monty Rakusen/Getty Images
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