Packaging Firm Novolex to Acquire Rival Pactiv Evergreen for $6.7 Billion
Packaging company Novolex will buy rival Pactiv Evergreen in a $6.7 billion deal. The all-cash transaction, backed by funds managed by affiliates of Apollo Global Management and the Canada Pension Plan Investment Board, will give Novolex a 32.4% premium over Pactiv’s closing price on December 2.
The deal, announced on Monday, offers $18 per share to take Pactiv private. Pactiv’s shares jumped approximately 19% to $13.85 in response to the news. Novolex will offer to acquire Pactiv in an all-cash transaction, including debt, which has received the support of Pactiv’s board of directors.
The acquisition is expected to bolster Novolex’s business of food and beverage packaging in a cautious economic environment. Packaging firms have been seeking deals in recent months due to easing demand following a boom fueled by e-commerce during the pandemic. Last month, Amcor agreed to buy US peer Berry Global for $8.4 billion, and International Paper said it would acquire British paper and packaging firm DS Smith.
Pactiv, which sells its products to restaurants, retailers, food and beverage producers, packers and processors, reported a decline in its third-quarter revenue last month due to lower sales volumes in the food and beverage merchandising segment and a loss, attributed to a rise in raw material costs. The merged company will be led by Novolex Chairman and CEO Stan Bikulege.
The combined firm will offer 250 brands and expanded distribution across the US, Canada, and Mexico. Barclays, Morgan Stanley, and RBC Capital Markets have been named as financial advisers to Novolex, while Goldman Sachs and Lazard are advisers to Pactiv.