Packaging: Sealed Air to acquire Diversey Holdings
Creates a global leader in sustainable solutions that provide hygiene, protection, food safety and security
in the NewsState of Logistics 2016: Pursue mutual benefit Case Study: LEAN Yields Big Results project44 and 10-4 systems announce strategic partnership to take effect in late 2016 FTR’s Trucking Conditions Index sees sequential gains Self-driving truck makes its first (beer) run More News
Sealed Air Corporation and Diversey Holdings announced that they have entered into a definitive agreement under which Sealed Air will acquire Diversey, a leading solutions provider to the global cleaning and sanitization market, in a transaction valued at $4.3 billion. The transaction is expected to be completed in 2011 and is expected to be accretive to earnings in the first full year following completion.
Under the terms of the agreement, Diversey shareholders will receive $2.1 billion in cash and an aggregate of 31.7 million shares of Sealed Air common stock valued at $25.68 per share based on Sealed Air’s closing stock price on May 31, 2011 for a total equity consideration of $2.9 billion. Diversey is a privately-owned company, controlled by members of the Johnson family and Clayton, Dubilier & Rice. Upon closing of the transaction, Diversey shareholders are expected to own approximately 15% of Sealed Air common stock.
Diversey provides cleaning, sanitization and hygiene solutions to industrial and retail customers in the food and beverage, food service, health care, and lodging sectors, as well as to building service contractors worldwide. In 2010, Diversey generated net sales of $3.1 billion and Adjusted EBITDA 1 of $453 million. Diversey employs more than 10,000 people worldwide and operates in more than 60 countries. Sealed Air is a leading provider of food and industrial system solutions that help ensure that food retains its freshness, products arrive undamaged, and transit efficiencies are maximized to reduce energy and waste. Sealed Air is focused on pioneering a differentiated, proprietary range of offerings in material science, automation technology and service-based solutions in order to provide comprehensive solutions to its customers. Sealed Air operates in 52 countries, employs more than 16,000 people and generated net sales of $4.5 billion in 2010.
“This transaction represents a strategic growth opportunity that leverages Sealed Air’s core competencies and positions our company to further capitalize on the megatrends that drive both businesses,” said William V. Hickey, President and Chief Executive Officer of Sealed Air. “With Diversey, we will expand our footprint beyond specialty packaging solutions by gaining entry into a $40+ billion chemical cleaning and hygiene industry that has attractive fundamentals and is already in our value chain. This combination is also financially compelling, and we expect it to deliver enhanced earnings per share and free cash flow generation, creating meaningful value for our shareholders.”
Mr. Hickey continued, “Sealed Air and Diversey have shared values, overlapping customers and end markets, and a common vision. By harnessing the strengths and sales capabilities of both companies, we will be able to bolster our solutions and services competencies and position Sealed Air for continued market leadership. We look forward to welcoming Diversey’s talented employees to the Sealed Air team.”
“We are excited about the opportunities we have to grow with Sealed Air through increased scale and expanded reach,” said Edward F. Lonergan, Diversey President and Chief Executive Officer. “We share a culture of innovation and a global vision for our business. Like Sealed Air, Diversey is committed to sustainable solutions, both in terms of our business and in terms of helping our customers protect human health while reducing waste generation and consumption of natural resources. I am confident that this is a winning combination for our employees and customers around the world.”
Diversey Chairman Helen Johnson-Leipold said, “Diversey shareholders determined that the best long- term opportunity for all stakeholders was a combination with Sealed Air. This was a difficult decision, but the compelling rationale was that together, we can leverage our expertise to transform our industry more rapidly and in more ways than either company could do alone. As the companies got to know each other, the leaders discovered an alignment of values and shared passion for industry-transforming innovation and sustainable solutions. The businesses, the teams, and our ambitions mesh well. And I’m pleased that Sealed Air has committed to continuing a strong presence in Racine, Wisconsin, the historic base of operations for Johnson family businesses.”
William V. Hickey will continue as President and Chief Executive Officer of Sealed Air. At the close of the transaction, Edward F. Lonergan, President and Chief Executive Officer of Diversey, and his team will join Sealed Air, and Mr. Lonergan will continue to lead the Diversey business. Sealed Air plans to maintain Diversey’s Americas business unit and R&D functions in Racine, Wisconsin
and to continue Diversey’s support and involvement in the Racine community.
Subscribe to Modern Materials Handling Magazine!Subscribe today. It's FREE!
Find out what the world’s most innovative companies are doing to improve productivity in their plants and distribution centers.
Start your FREE subscription today!
System Report: Brownells new DC is flexible and responsive Pallet Usage Report: Pallets Remain Critical in the Modern-Day Warehouse View More From this Issue