| BMO
Capital Markets Releases Annual M&A Report on the Global Packaging
Industry
M&A activity hit record levels in 2007 despite the challenging credit
environment in the latter part of the year
CHICAGO,
March 6, 2008 – BMO Capital Markets, the investment and
corporate banking arm of BMO Financial Group (NYSE, TSX: BMO), has released
its latest report entitled Mergers & Acquisitions in the Packaging
Industry: Annual Deal Review.
The report provides
the most comprehensive review of M&A activity
in the global packaging industry in 2007. The report examines M&A
activity by packaging sector, by strategic and financial acquirers, by
geography, and by transaction valuations.
“The packaging M&A market had a record year in 2007 despite
the market challenges in the latter part of the year,” said Doug
Lawson, Managing Director and head of BMO Capital Markets’ packaging
practice.
“For much of 2007, there existed very favorable conditions for
M&A, including a strong economy and favorable credit markets. These
factors combined with healthy balance sheets, significant availability
of private equity capital and a strong rationale for continued consolidation
drove the record M&A levels in the packaging sector,” he added.
Mr. Lawson noted, “Deal flow slowed in the latter part of 2007
and is down in the first two months of 2008 versus the prior year,
however, there continues to be interest in the sector and a strong
rationale for continued consolidation remains.”
Highlights of the report include:
- M&A
volume increased for the fifth consecutive year
The number of transactions in the packaging industry continued to increase
to 386 deals, representing a 10 per cent increase year-over-year from
351 deals in 2006. The number of deals had not been as high since 2000,
when there where 385 transactions.
- Aggregate
packaging value reached $32.6 billion for the 137 transactions with
reported
values
- The median
reported packaging transaction value was $35.3 million in 2007
This represents a significant increase over the median value in 2006
of $21 million. In addition, nine of the 10 largest reported deals exceeded
$1 billion in Enterprise Value versus only two of the 10 largest reported
deals in 2006.
- Acquirers
of all types were active
Strategic and private equity acquirers (including their portfolio companies)
were all active in the packaging industry in 2007, accounting for 66
per cent and 34 per cent of transactions, respectively. Overall, public
companies account for the greatest proportion (34 per cent) of packaging
acquisitions.
- M&A
activity was strong across all regions of the world
In 2007, strategic acquirers increasingly looked outside of the U.S.
and Europe for acquisitions as only 64 per cent of target companies
were located in North America or Europe in 2007, versus 74 per cent
in 2006.
- Transaction
volume was strong across the rigid, flexible and paperboard sectors
In 2007, the number of deals in the packaging industry was relatively
evenly dispersed between the rigid packaging sector (27 per cent), flexible
packaging (26 per cent), and paperboard packaging (22 per cent). The
remainder of activity was split between the label, machinery, and other
packaging sectors.
About the BMO Capital Markets Packaging Group
The BMO Capital Markets Packaging Group has substantial transaction experience
across the broad spectrum of the packaging industry. With six dedicated
investment banking professionals, the group has led numerous M&A
and financing transactions of packaging companies. The team has significant
experience in representing public, private and private-equity owned
companies across a variety of packaging sub-sectors that include Flexible,
Rigid, Paperboard, Labels, Contract Packaging and Machinery.
Journalists:
To request a copy
of the Mergers & Acquisitions
in the Packaging Industry: Annual Deal Review or to subscribe
to The
Converter, a monthly
BMO newsletter which reports on the activities and trends shaping this
industry, please visit www.bmocm.com/industry/packaging/ or send an email to Doug Lawson at doug.lawson@bmo.com.
About BMO Capital Markets
BMO Capital Markets is a leading full-service North American financial
services provider, with over 2,000 employees operating in 14 North
American offices and 26 worldwide, offering corporate, institutional
and government clients access to a complete range of investment and
corporate banking products and services. BMO Capital Markets is a member
of BMO Financial Group (NYSE, TSX: BMO), one of the largest diversified
financial services providers in North America with more than CAD$377
billion and more than 36,000 employees as at January 31, 2008.
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For more information, visit www.bmocm.com.
Contact:
Kim Hanson, Toronto, kim.hanson@bmo.com,
(416) 867-3996
Amy Yuhn, Chicago,
amy.yuhn@harrisbank.com, (312) 461-2478
Kevin Windorf, New York, kevin.windorf@bmo.com,
(212) 885-4111
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