Flexible Packaging Newsletter - Q1 2021

Flexible Packaging Trends

During the first quarter of 2021, accelerated COVID-19 vaccination efforts helped to create a much more optimistic view of the global economy. Consumer behavior, production levels, and eagerness towards strategic expansion are all trending upward, which bodes well for the flexible packaging industry and the economy at large. See below for TKO Miller’s Proprietary Flexible Packaging Index charted against the S&P 500 Index over the last three months. Packaging demand remains strong as consumers continue to prefer e-commerce methods of shopping as well as product sterility and shelf-stability. In addition, polypropylene and polyethylene resin supply shortages continue to impact manufacturers’ bottom lines as raw material prices increase.

Flexible packaging M&A activity has picked up steam in Q1.  Capital IQ reports that the number of closed global flexible packaging deals in Q1-2021 grew by 40% over Q1-2020 and 8% over Q4-2020. Public company valuations grew by 10% from Q1-2020 and stayed relatively flat from Q4-2020. General middle market valuation multiples rebounded late in the year ending the year on par with 2019, despite the COVID-19 pandemic. Early signs in 2021 suggest that the valuations for flexible packaging companies are holding strong and should be on par with or exceeding 2019 and 2020 levels.

By Joe Froehlich on Apr 20, 2021 9:29:23 AM