Essentra has signed an agreement to acquire Clondalkin Group’s Specialist Packaging Division (Clondalkin SPD) in a move designed to enhance Essentra’s existing geographic presence in healthcare packaging and, through leveraging the combined footprint of both businesses, to exploit both existing and new growth opportunities.
The deal, for a cash consideration of approximately 455 million USD, is expected to complete in the first quarter of 2015, and represents Essentra’s largest acquisition to date.
It significantly extends the company’s existing packaging capabilities and creates a ‘global value proposition’ to serve its customers.
Clondalkin SPD is a global provider of a broad suite of speciality secondary packaging options for the pharmaceutical, and health and personal care industries, and operates 24 facilities. The acquisition will transform Essentra’s position in these end markets, significantly enhancing its existing geographic presence in healthcare packaging, as well as grow its footprint in North America and Europe, where Clondalkin SPD has a strong presence.
The acquisition of Clondalkin SPD is consistent with Essentra’s strategy of complementing balanced, profitable organic growth with value-adding acquisitions in its targeted end markets.
Through leveraging the combined footprint of both businesses, Essentra said it will look to further exploit both existing and attractive new growth opportunities.
In addition, Clondalkin SPD’s product portfolio of folding carton, product literature and labels is complementary to Essentra’s current packaging and authentication capabilities, thereby broadening the range and innovation offered to customers.
David Lennon, co-CEO of Clondalkin Group, said: ‘We believe that Essentra will continue to build upon the legacy of excellent service and high quality built by the strong teams in place across our businesses in Europe and North America. We also believe the deep commitment Essentra has demonstrated to pharmaceutical and healthcare packaging through its extensive network of well invested plants makes it an ideal owner of this business.’
Malcolm Waugh, Essentra Group commercial director, said: ‘Clondalkin SPD is a highly attractive business, with a focus on the growing health and personal care industries, and a comprehensive offering of high quality, innovative and mission critical products to meet the exacting requirements of an international customer base, which is increasingly seeking a global partner for their packaging solutions.’
Colin Day, chief executive of Essentra, added: ‘The acquisition of Clondalkin SPD is a compelling strategic and complementary fit for Essentra, which transforms our existing geographical capabilities to pharmaceutical and healthcare customers who are increasingly seeking a global partner for their packaging requirements. In addition, Clondalkin SPD substantially enhances Essentra’s position in the growing personal care and beauty packaging industry. With an experienced management team and proven track record, this acquisition – being the largest in the Company’s history – underscores Essentra’s commitment to building a leading global provider of essential components and solutions in our targeted market categories.'
Commenting on the deal's position in the ongoing field of M&A activity in the packaging sector, Nicholas Mockett, head of packaging mergers and acquisitions at Moorgate Capital, said: 'Following Essentra’s acquisition of Contego Healthcare, the fit with Clondalkin was obvious. The two businesses have complementary product overlap and geographic footprints.
'This transaction continues the trend of mergers and acquisitions in pharmaceutical packaging as the leading manufacturers service the global pharmaceutical manufacturers in multiple jurisdictions and follows the acquisition of Chesapeake by Carlyle and the recent sale of Medica to private equity firm Sullivan Street Partners.'