WestRock Enters Agreement to Acquire Multi Packaging Solutions
WestRock Company and Multi Packaging Solutions International Limited (“MPS”) have announced that a definitive agreement has been reached for WestRock to acquire all of the outstanding shares of MPS for $18.00 per share in cash and the assumption of an estimated $873 million in net debt, for a total enterprise value of $2.28 billion. This enterprise value represents a trailing 12-month adjusted EBITDA multiple as of Sept. 30, 2016, of 9.6 times, and 7.1 times including anticipated synergy and performance improvements. The acquisition is expected to be immediately accretive to WestRock’s financial results, both on an earnings per share basis and cash flow basis, inclusive of purchase accounting adjustments.
Founded in 2005, and headquartered in New York City, MPS is a recognized leading global provider of print-based specialty packaging solutions. MPS' differentiated product offering includes premium folding cartons, inserts, labels, and rigid packaging, and it serves a diverse, blue chip customer base, primarily in the growing consumer and healthcare sectors. The company serves its customers on a global basis through 59 locations across North America, Europe and Asia. On a trailing 12-month basis as of Sept. 30, 2016, MPS generated revenue of $1.6 billion and adjusted EBITDA of $237 million.
The transaction will be financed through a combination of cash on hand and existing credit facilities. WestRock expects to refinance existing MPS debt assumed as part of the transaction upon closing.
“The acquisition of MPS is an important step forward that advances our strategy and will create significant value for our customers, employees and shareholders,” Steve Voorhees, CEO of WestRock, said. “Through this transaction, we will add a leader in the value-added packaging sector that strengthens our differentiated portfolio of paper and packaging solutions. Led by their talented management team, MPS shares our commitment to provide our customers with differentiated packaging solutions that help them win in the marketplace.
"The combination of WestRock and MPS creates opportunities to drive margin expansion and enhanced financial returns through a combination of increased integration and identified synergies," Voorhees added. "Overall, this is a highly strategic transaction consistent with our balanced capital allocation strategy that we expect will generate compelling growth and returns. We have the right team in place with deep integration experience to fully realize this opportunity."
Marc Shore, CEO and founder of MPS, said, "The MPS family is excited to join WestRock and take this logical next step in the progression of our company. Becoming part of WestRock greatly enhances the portfolio of products we can offer our customers and provides additional scale, resources and capabilities."
Shore and Dennis Kaltman, president, MPS, will join WestRock as part of the transaction.
