Crown Holdings Inc. (CCK), a U.S. consumer-goods packaging manufacturer, agreed to buy Spanish food-can maker Mivisa Envases SAU for 1.2 billion euros ($1.64 billion) including debt from Blackstone Group LP (BX), N+1 Mercapital and the company’s management.
The deal is expected to close next year, Philadelphia-based Crown said today in a statement. The acquisition has committed debt financing and is subject to review by the European Commission and other regulatory authorities.
Crown plans to purchase Mivisa, the largest food-can producer in the Iberian Peninsula and Morocco, to expand in Europe and the Middle East where Crown generated $4 billion of sales in 2012, or 47 percent of the company’s revenue, according to a filing. The Murcia, Spain-based company had sales of 555 million euros and earnings before interest, taxes, depreciation and amortization of 133 million euros in the year ended June 30, Crown said.
That implies Crown paid about 9 times Mivisa’s earnings before interest, taxes, depreciation and amortization. The average Ebitda multiple in four acquisitions of packaging companies in the past 5 years valued at $100 million or more is 7.7, according to data compiled by Bloomberg.
Mivisa’s food-can business earns 24 percent Ebitda margins, or double Crown’s European food-can margins, due to a much lower cost structure, Philip Ng, an analyst at Jefferies Group LLC, wrote in a note today, referring to Crown by its stock ticker. “With investors’ appetite for companies with leverage to a potential recovery in Europe, we view the acquisition as a positive for Crown’s margin profile.”
Crown, which makes containers from beer and soft-drink cans to candy boxes and aerosol spray bottles, rose 7.3 percent to $43.60 at the close in New York, the most since Aug. 9, 2011. The shares have climbed 18 percent this year.
Citigroup Inc. was Crown’s financial adviser on the deal.
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