(Reuters) - Private equity firm Leonard Green & Partners LP is nearing a deal to acquire U.S. packaging company Pro Mach Group Inc from buyout firm AEA Investors LP for more than $2.2 billion, including debt, people familiar with the matter said on Sunday.
The deal would come eight months after Leonard Green acquired Charter NEX Films Inc, a U.S. manufacturer of specialty films for the food and medical industries, for $1.5 billion, including debt. It underscores the appetite of buyout firms for packaging companies serving the food, beverage, household goods and pharmaceutical industries.
Leonard Green has agreed to pay AEA the equivalent of about 15 times Pro Mach’s 12-month earnings before interest, taxes, depreciation and amortization to clinch the deal, a hefty price for a company in this sector, the sources said.
The sources asked not to be identified because the negotiations are confidential. Pro Mach, Leonard Green and AEA did not respond to requests for comment.
The food packaging sector has been traditionally popular with private equity firms because it is viewed as generating stable cash flows that are more resilient in the face of economic downturns.
Based in Covington, Kentucky, Pro Mach makes a range of packaging products, including bottle-capping machinery and labeling equipment. It was acquired by AEA from Jordan Co, the New York-based buyout firm, in 2014 for about $1 billion, including debt.
Reporting by Greg Roumeliotis and Harry Brumpton in New York; Editing by Cynthia Osterman