Silgan Completes Acquisition of Global Dispensing Business and is Further Strengthening Its Closures Franchise
Silgan Holdings Inc. (Nasdaq:SLGN), a leading supplier of sustainable rigid packaging solutions for consumer goods products, announced today that it completed its acquisition of the dispensing business of the Albéa Group. This business is a leading global supplier of highly engineered pumps, sprayers and foam dispensing solutions to major branded consumer goods product companies primarily in the beauty and personal care markets. It operates a global network of 10 plants across North America, Europe, South America and Asia. This business generated sales of approximately $395 million in 2019.
The purchase price for this acquisition was $900 million, subject to adjustments outlined in the purchase agreement for this acquisition. The Company funded the purchase price for this acquisition and related costs and expenses through term and revolving loan borrowings under its senior secured credit facility, including a $900 million delayed draw term loan.
This acquisition is expected to be modestly accretive to the Company’s earnings in 2020, excluding the impact of required purchase accounting adjustments and after taking into consideration the Company’s estimate of the current negative impact caused by the coronavirus (COVID-19) crisis on the beauty and personal care markets. With this acquisition, Silgan expects to realize operational cost synergies of $20 million, on an annual run rate basis, within 18 months primarily through procurement savings, manufacturing efficiencies and reductions in general and administrative expenses. As a result, this acquisition is expected to become more accretive as synergies are phased in over the next 18 months and customer buying patterns for the beauty and personal care markets return to more normal levels. Silgan updated its earnings estimate for the full year 2020 for this acquisition and its recent debt financing transactions when it announced its earnings results for the second quarter of 2020 in July 2020.