The Converting Curmudgeon

Here’s an overview of 2011 packaging mergers & acquisitions activity globally and in North America via BMO  Capital Markets’ The Converter.

Global Historical Deal Volume – Global packaging M&A volume continued to strengthen in 2011 after rebounding in 2010 from historic lows in 2009.

• There were 274 transactions announced globally last year, which represents a 20% increase over the 228 transactions announced in 2010; however, 2011 M&A levels were still 22% lower than the peak of 350 packaging deals in 2007.
• For the 96 deals with reported values in 2011 (35% of all packaging deals), aggregate deal value was $20.0 billion, and the median reported value was $27.7 million. In 2010, 78 deals had reported values (34% of total), and the aggregate and median deal values were $20.0 billion and $67.0 million, respectively.

North American Historical Deal Volume – North American transaction volume (deals in which the target was located in the US or Canada) also increased in 2011.

• In 2011, there were 86 announced transactions in North America, which represents an increase of 8% from the 80 deals in 2010.
• North America made up 31% of 2011 global volume versus 35% in 2010.
• The aggregate reported deal value for the 28 transactions with reported enterprise values was $15.3 billion in 2011, with a median value of $105.5 million. In 2010, the aggregate and median deal values were $10.3 billion and $126.2 million, respectively, for the 22 transactions with reported values.

Deal Volume by Sector – Deal activity in North America was relatively similar to the global market. Variance in volume between the different sectors is primarily attributed to differences in overall market size and varying degrees of fragmentation.

• Paperboard accounted for the second-largest proportion of deals, with 21% of global volume and 24% of North American volume; flexible was tied as second largest globally with 21% of volume, and was third largest in North America with 22% of volume.
• The number of global transactions increased from 2010 to 2011 across all sectors except packaging machinery, in which the number of transactions decreased slightly.
• North American transactions increased from 2010 to 2011 in the flexible, paperboard and labels segments and decreased in packaging machinery.