Wendel agrees deal to acquire Constantia Flexibles from OEP

Funds advised by One Equity Partners (OEP) and the H. Turnauer Foundation have agreed to sell Constantia Flexibles to French investment house Wendel Group, valuing the business at around 2.3 billion EUR (2.8 billion USD).
Wendel acquires Constantia Flexibles from OEP

Constantia Flexibles is a manufacturer of flexible packaging products and labels. OEP acquired the company in 2009, when it took over the majority of Constantia Packaging AG, and holds 75 percent of Constantia Flexibles, with the remaining 25 percent owned by the H. Turnauer Foundation.

Constantia Flexibles supplies its products to numerous multinational companies and local market leaders in the food, pet food, pharmaceutical and beverage industries. Constantia Flexibles employs over 8,000 people in almost 80 group companies and delivers to over 3,000 customers worldwide. In 2013, the company achieved sales of 1.63 billion EUR and earnings of 233 million EUR. Since OEP’s investment, sales have grown by 73 percent and earnings by 76 percent.

Thomas Unger, Constantia Flexibles chief executive officer, said: ‘In recent years Constantia Flexibles has developed from a regionally-focused provider in Europe into a globally-active group present in the most attractive and fastest growing markets for flexible packaging. We have positioned the company outstandingly for further profitable growth, and we will be working with our new owner to realize this potential in the future.’

Wendel is one of Europe's leading listed investment firms. The group invests internationally in companies such as Bureau Veritas, Saint-Gobain, Materis Paints, Stahl and IHS. Wendel plays an active role as industry shareholder in these companies. It implements long-term development strategies, which involve boosting growth and margins of companies so as to enhance their leading market positions.
Frédéric Lemoine, chairman of Wendel’s executive board, said: 'In acquiring Constantia Flexibles, Wendel is carrying out a major transaction that is right in line with the strategy announced. Constantia Flexibles is a very strong industrial company and one of the world’s leaders in packaging solutions. The segment in which the company specializes, flexible packaging, is being buoyed by underlying, worldwide market trends, and in the future, Constantia Flexibles will be able to grow both by organic means and by acquisition, as the market is still very fragmented.
'Moreover, the company has been developed by a very entrepreneurial Austrian family, and Wendel would be pleased to enter into a cooperation agreement with the H. Turnauer Foundation, which plays an active role as a minority shareholder in Constantia Flexibles.
'This acquisition represents a significant milestone in Wendel’s 2013-17 strategy, which consists in investing two billion EUR in the top-tier unlisted companies in Africa, North America and Europe.”
Melchior von Peter, managing director at OEP, said: ‘We are very happy with the way that Constantia Flexibles has developed over the last five years under the ownership of OEP. Thomas Unger and the management team, along with all the employees of Constantia Flexibles, have done an excellent job. On behalf of OEP, I would like to say thank you for the outstanding cooperation.’
The H. Turnauer Foundation intends to remain a significant shareholder of the company and is currently discussing with Wendel a potential reinvestment.

Nicholas Mockett, head of packaging mergers and acquisitions at Moorgate Capital, said: ‘Constantia, which acquired Spear Group in 2013 is one of the world’s largest printers of flexible packaging and labels. The acquisition of Constantia by Wendel is the most significant deal in the flexible packaging industry since Amcor’s acquisition of the Alcan assets in 2009.

‘The strong interest in the business demonstrates the attractive markets it operates in which are growing and also defensive.

‘Flexible packaging, film and labels are growth markets globally and Constantia serves attractive segments such as food and beverage, which are benefitting from the ageing population, increasing population, and burgeoning middle class.’

The transaction is subject to approval from the relevant antitrust authorities and is expected to be closed in the first half of 2015.