Silgan acquires WestRock Company's dispensing systems business for USD1.025bn
Apr 07, 2017 (M2 EQUITYBITES via COMTEX) --
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Silgan Holdings Inc (Nasdaq:SLGN) declared on Friday that it closed its acquisition of the dispensing systems business of WestRock Company (NYSE:WRK), for a purchase price of USD1.025bn, subject to adjustments outlined in the purchase agreement.
This business of WestRock is a global supplier of engineered triggers, pumps, sprayers and dispensing closure solutions in the home, health and beauty markets. With a global network of 13 plants in North America, Europe, South America and Asia, it generated sales of about USD570m in 2016.
Also, the company said it financed the purchase price through term and revolving loan borrowings under its senior secured credit facility, including a USD800m delayed draw term loan.
Finally, this acquisition is expected to be profitable to the company's earnings, without the impact of the required purchase accounting adjustments. It now expects to realise operational cost synergies of USD15m within the next 24 months through reductions in general and administrative expenses mainly, procurement savings and manufacturing efficiencies. Together with the update of its earnings guidance for the full year 2017, for this acquisition and its recent debt financing transactions will be declared when the earnings results for the first quarter of 2017 are released on 26 April 2017.
A supplier of rigid packaging for consumer goods products, Silgan's annual net sales for 2016 were about USD3.6bn. It has a 100 manufacturing facilities in North and South America, Europe and Asia and it supplies metal containers in North America and Europe; supplies metal and plastic closures and dispensing systems globally; and plastic containers in North America.