Flexible Packaging Newsletter - Q4 2019

TKO Miller Market Analysis 

• Flexible packaging multiples have increased 20% since 2015 (see valuation index below) as strategic and financial sponsors continue to place premiums on platform and add-on acquisitions with stable cash flows, non-cyclical end markets, and attractive margin profiles.
• Packaging continues to remain attractive to private equity investors because it is seen as lower risk and less cyclical than other sectors. PE investors, who often rely on heavy amounts of leverage, like that flexible packaging is driven by counter-cyclical industries such as healthcare, food, or personal care.
• M&A is being used to create operational efficiencies and growth, which in turn allows acquirors to better compete with larger entities and respond to rapidly changing consumer demands.
• The industry continues to see steady consolidation with preliminary results showing 28 transactions in 2019, just below 2018’s record 33 transactions. 
  
• Flexible packaging used for food sold in retail outlets and to institutions makes up 50% of the $31.8 billion market. This segment has seen growth due to innovative technology and the ability to adapt to consumer preferences.

Recent Flexible Packaging Transactions 

By Joe Froehlich on Jan 19, 2020 9:00:00 AM