M&As: Sealed Air to clinch APS bagging firm for US$510 mn

US packaging firm Sealed Air Corporation is to acquire Automated Packaging Systems, Inc. (APS), a manufacturer of automated bagging systems, for a purchase price of US$510 million on a cash and debt free basis.

APS provides full flexible packaging systems, and is known for inventing Autobag bagging machines and pre-opened bags on a roll, APS also offers three recycled film solutions under the EarthAware brand.

Founded in 1962 with headquarters in Ohio, APS employs more than 1,200 people, serves customers in over 60 countries and operates seven manufacturing sites in the US and UK. In 2018, APS generated US$290 million in sales, an increase of approximately 10% year-over-year.

Ted Doheny, Sealed Air President/CEO said, “The addition of APS is well aligned with our Reinvent SEE goal of doubling our innovation rate over the next five years. This transaction expands the breadth of our automated solutions and sustainable packaging offerings, giving us access to growth opportunities in the markets we serve.”

APS brings highly complementary and additive capabilities to Sealed Air, including expertise in engineering, automation technology and sustainability, which strengthens the Sealed Air’s protective packaging solutions.

Sealed Air, which makes Bubble Wrap, says it will benefit from cross-selling opportunities enabling additional growth in key markets and cost synergies resulting from supply chain efficiencies. The transaction is expected to be accretive to Adjusted EBITDA in 2019.

Sealed Air intends to use cash on hand and credit facilities to finance the transaction. The transaction is expected to close early in the third quarter of 2019, subject to applicable regulatory reviews and customary closing conditions.