Pactiv Evergreen has agreed to be acquired and taken private by Novolex in a monumental all-cash deal valued at $6.7 billion, which includes debt as per a joint statement released on Monday. Shareholders of Pactiv Evergreen will benefit from this acquisition by receiving $18 per share in cash, signifying a 49% premium over the packaging products maker's two-month average price preceding December 2, the last trading day before speculation arose regarding a potential deal.
This news led to a striking 19% increase in Pactiv Evergreen's stock during Monday trading. The transaction, which awaits regulatory approval, is anticipated to conclude by mid-next year. The majority shareholder of Pactiv Evergreen, Packaging Finance, has given their stamp of approval for this deal, marking the end of Pactiv’s public trading once it finalizes.
Michael King, Chief Executive of Pactiv Evergreen, stated, "The board and leadership team evaluated a range of opportunities and are confident this transaction maximizes shareholder value and is the best path forward for all stakeholders." The companies involved foresee that the asset base of the combined entity will comprise an extensive manufacturing footprint alongside an expanded distribution network.
This transaction is backed by Novolex's majority shareholder, Apollo Global Management, along with the Canada Pension Plan Investment Board, which is set to invest approximately $1 billion and emerge as a significant minority shareholder in the merged company. Stan Bikuleg, CEO of Novolex, remarked, "This transaction reflects the continuation of our long-term growth strategy," indicating that he will lead the amalgamated company.
He highlighted that Pactiv Evergreen's robust product portfolio along with their talented team will bolster and add significant depth to Novolex's diverse packaging solutions. In the previous month, Pactiv Evergreen reported third-quarter adjusted earnings of $0.36 per share, an increase from $0.32 the previous year, although revenue experienced a decline of 3% to $1.33 billion.
At that time, the company projected 2024 adjusted earnings before interest, taxes, amortization and depreciation to fall within the $800 million to $810 million range. Rob Seminara and Peter Sinensky, partners at Apollo, expressed, "As the packaging industry continues to evolve, bringing together these two talented teams will better position the combined company with enhanced and complementary capabilities to meet shifting consumer demands and provide the highest quality products and services to customers.".