Novolex has announced its acquisition of competitor Pactiv Evergreen in a transaction valued at $6.7 billion, per Reuters. This strategic move aims to bolster Novolex's food and beverage packaging position amidst a cautious economic environment. The acquisition involves an all-cash purchase of Pactiv for $18 per share, including debt, representing a 32.4% premium over Pactiv's closing price on December 2.
“This transaction reflects the continuation of our long-term growth strategy to create the industry’s most innovative, sustainable and customer-focused company,” said Stan Bikulege, Chairman and CEO of Novolex. “Pactiv Evergreen’s strong product portfolio, along with their talented team, will complement and add significant depth to Novolex’s diverse packaging solutions. Our companies share a dedication to customer success, a steadfast entrepreneurial spirit and have aligned values of integrity, collaboration and excellence. Our commitment to employees is unwavering in making this a best-in-class, high growth platform. We’re excited to continue our growth journey and are confident this combination will strengthen the future of food and beverage packaging.”
The announcement has led to a significant increase in Pactiv's share value, which rose by approximately 19%. Pactiv, which serves a diverse clientele that includes restaurants, retailers, and food producers, recently reported a decline in third-quarter revenue due to lower sales volumes and increased raw material costs.
Michael King, President and Chief Executive Officer of Pactiv Evergreen, said, “We are pleased to reach this agreement with Novolex, which shares our commitment to product quality and recognizes our potential for future growth. The Board and leadership team evaluated a range of opportunities and are confident this transaction maximizes shareholder value and is the best path forward for all stakeholders. This milestone is a testament to our talented employees, and Pactiv Evergreen’s inherent value. Over the past three years, we’ve made significant progress on our transformation, focusing on our core strengths while driving operational excellence and enhancing profitability. We look forward to this next exciting chapter.”
The merger, backed by investments from Apollo's affiliates and the Canada Pension Plan Investment Board, will enable the combined entity to offer an extensive portfolio of 250 brands. This expanded offering will enhance distribution capabilities across the United States, Canada, and Mexico. The leadership of the newly formed company will be under the guidance of Novolex Chairman and CEO Stan Bikulege.
Barclays Bank, Morgan Stanley, and RBC Capital Markets are providing financial advisory for Novolex, while Goldman Sachs and Lazard Freres are advising Pactiv.
Novolex is a leading packaging solutions provider and is known for its commitment to sustainability and innovation in the industry. Pactiv Evergreen is a major supplier of food and beverage packaging products, catering to a wide range of customers in North America.
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