‘Financial investors have woken up to the attractions of packaging’

CSP produces plastic packaging for the healthcare, food and beverage industry. It is headquartered in Auburn, Alabama with manufacturing facilities in Niederbronn, France.

Strong priority on North America

It will be the second acquisition this year after Wendel bought Constantia​ for €2.3bn.

Frederic Lemoine, chairman, executive board, Wendel said after the recent acquisition of Constantia Flexibles in Europe and several investments in Africa, it is placing a strong priority on North America, continuing on its objective to invest €2bn by 2017 in Europe, North America, Africa and other high-growth regions.

Nicholas Mockett, head of Packaging M&A, Moorgate Capital, told FoodProductionDaily this latest deal by Wendel in North America, which mirrors the Constantia acquisition in Europe, reinforces the argument that financial investors have, in recent years, woken up to the attractions of packaging.

“The vital role packaging plays in reducing food waste is increasingly important as the growing global population and middle classes demand more food and protein in particular; and investors can understand that​,” he said.

“Additionally, packaging fares better than many other industries if an economy slows, therefore protecting investor down-side​.

Wendel opens New York office

“For flexibles, the growth trend is typically above GDP which augurs well in economies like the US and UK which are growing faster than their peers in other western markets including the Eurozone​.”

CSP has over 400 employees, with 300 based in the US, and is expected to generate over $100m in revenue in 2014 and free cash flow of approximately $26m in 2014.

The acquisition comes over a year after Wendel opened an office in New York to cover the North American market.

Lemoine added CSP’s management team has delivered consistent growth over a long period of time, led by a strong focus on quality and innovation.

He said the firm looks forward to further supporting John Belfance, CEO, CSP Technologies and his team as it continues to expand into new markets.

“We welcome Wendel as a strategic partner as we continue to execute our domestic and international business objectives,” added Belfance.

Under the proposed acquisition, the Wendel group would invest approximately $190m in equity and would hold 98% of the equity alongside management.

New borrowings to support the acquisition would total $170m. Following customary consultation with the company’s French Workers Council and after receiving the necessary approvals from the antitrust authorities, the transaction is expected to close in the first quarter of 2015.