As head of packaging M&A at Moorgate Capital, occasional skier and polo fan Nicholas Mockett has spent two decades advising the global packaging industry to help maximize its performance. In that time, he has seen the market consolidate and change beyond recognition, culminating in last year’s record-setting level of packaging M&A. He is an active Liveryman of the Worshipful Company of Stationers and Newspapermakers, and has recently concluded a 10-year term with charity Breast Cancer Care as a trustee.
Labels & Labeling (L&L): Who is Moorgate Capital and what is your role at the company?
Nicholas Mockett (NM): Moorgate Capital is a corporate finance and mergers and acquisitions (M&A) advisory firm. This means that it helps people to buy and sell companies, as well as other corporate finance assignments such as raising capital (equity and debt), management buy-outs and defending against hostile bids. Its clients are multinational public companies, private equity houses and their portfolio companies, management teams, family businesses, banks and lending institutions and state owned enterprises. Moorgate works with clients around the globe in America, Asia, Australasia, Latin America, the Middle East and Africa, as well as throughout Europe – east and west. Most of the deals are in the 100 million USD to one billion USD value range although some mandates have been for transactions of several billion dollars. Moorgate’s key differentiator, compared with the bulge bracket multi-faceted investment banks, is that it does not compete against clients or expect them to borrow money. My role is to head up our specialism in the packaging related industries, the sector I have covered for over 20 years.
L&L: How did you come to be involved with packaging M&A?
NM: Early on in my corporate finance career I realized that understanding the client’s industry was critically important. So, I decided to pick one sector and focus on it exclusively. By then, I‘d advised on transactions in retail, building products, packaging and IT. At that time, pharmaceutical manufacturers were going through a massive wave of consolidation, such as Glaxo merging with Wellcome, so I applied some business school training, including Porters 5 Forces, and concluded that suppliers to the pharmaceutical industry would need to consolidate, hence packaging. It proved to be an excellent decision. At that juncture there were about 25 public packaging companies listed on the London Stock Exchange. Packaging even had its own sector heading in the stock price pages of the Financial Times. Now there are only three or four PLCs. With the move from public ownership, investment banks can no longer sell broking or analyst services, and without those departments sourcing deal leads, to throw over the ‘Chinese Wall’ to the corporate finance department, those investment banks discontinued dedicated corporate finance coverage for packaging. I was fortunate to have the then world’s largest packaging company, Stone Container Corporation of Chicago, as my first client and MY Holdings, which was listed on the London Stock Exchange, as my second. Now 20 years on, I have never looked back and enjoy great relations with the industry which is packed with talent yet remarkably down to earth.
L&L: How big is the appetite for M&A in the packaging market at the moment? How does this compare historically?
NM: It has never been bigger. 2015 saw the highest ever level of packaging M&A with over 35 billion USD of deals – even higher than the 33 billion USD 2007 peak before the credit crunch. We’re continuously educating investors of the merits of the packaging industry. For example, over a 10-year period from 2005 to 2015, with 100 GBP invested in the FTSE100 (the largest 100 companies quoted on the London Stock Exchange) the value would have grown by 1.5 percent. In the Containers & Packaging index it would have been 61.8 percent. You would be surprised how many financial institutions, including private equity houses, have become much more interested in packaging M&A armed with that data.