NEW YORK, July 17 (Reuters) - Private equity firm American Securities is exploring a sale of portfolio company Tekni-Plex, the U.S. manufacturer of packaging and tubing materials, four sources familiar with the matter said.
American Securities has hired Evercore and Credit Suisse to line up potential buyers for Tekni-Plex, two of the people said.
Through its healthcare, specialty packaging and food packaging segments, King of Prussia, Pennsylvania-based Tekni-Plex produces specialty packaging including medical tubing, pharmaceutical ﬁlms, and dispensing components. The potential sale would come at a time when the pharmaceutical and healthcare sector is forecast to be the fastest growing packaging end market over the next five years, due in part to an aging population and government safety regulations.
The sources asked not to be named because the matter is private. Tekni-Plex did not respond to requests for comment, while Evercore, Credit Suisse and American Securities declined to comment.
American Securities acquired Tekni-Plex from Oaktree Capital Management in December 2013 for an undisclosed sum. At the time, Reuters reported the deal could be worth up to $800 million. Under American Securities’ ownership it has acquired multiple closure liner businesses and Gallazzi’s Italian pharmaceutical films businesses.
Packaging-related buyout transactions total $5.7 billion so far in 2017, having slowed to $15.9 billion last year from $26.6 billion in 2015, according to Thomson Reuters data. In May, U.S. buyout firm Leonard Green & Partners LP acquired Charter NEX, a manufacturer of specialty films for the food and healthcare industries, for $1.5 billion. The valuation was around 14 times the company’s 12-month earnings before interest, taxes, depreciation and amortization, or Ebitda, according to Reuters. Loews Corporation bought rigid plastic packager Consolidated Container Company for $1.2 billion, roughly 9.0 times Ebitda, sources said.
The world packaging market is expected to reach nearly $1 trillion in 2020, after growing 3.5% annually since 2015, according to packaging, paper and print industry market research firm Smithers Pira. (Reporting by Andrew Berlin; Editing by Michelle Sierra)