Silgan is expected to update its earnings guidance for the full year 2017 for this acquisition and its recent debt financing transactions during its Q1 2017 earnings results on April 26.
Spirits & confectionery
Steve Voorhees, CEO, WestRock, told Reuters the company had made several investments to enhance its portfolio over the past year and it wanted to sell its dispensing business to focus on its core paper and packaging technology.
It announced plans to buy Multi Packaging Solutions International for $1.39bn in January to boost its exposure to the fast growing healthcare, spirits, confectionery, and cosmetics markets.
The deal will also boost the presence of WestRock, as the number two US packaging company behind International Paper, in Europe.
Silgan Holdings announced earlier this year it wanted to acquire WestRock Company to expand its global closure market to dispensing systems for food, beverage, health care, garden, home and beauty products, in addition to its hotfill vacuum closures and coldfill closures.
“This business has a long history as a differentiated packaging franchise with deep customer relationships, a clear focus on the needs of its customers and markets and a strong track record for product innovation to meet these needs,” said Tony Allott, president/CEO, Silgan.
“This acquisition allows us to further build relationships with common global customers, provides significant opportunities for cost synergies, creates an incremental platform for growth and strongly enhances our free cash flow.”
WestRock Company has 13 plants across North America, Europe, South America and Asia and generated sales of approximately $570m last year.
With this acquisition, Silgan expects to realize operational cost synergies of $15m within 24 months, primarily through reductions in general and administrative expenses, procurement savings and manufacturing efficiencies.
Silgan which supplies metal containers in North America and Europe for food and general line products has 100 manufacturing facilities in North and South America, Europe and Asia.