Mesirow Releases Mid-Year M&A Report

Published: July 27, 2017

CHICAGO, IL | Mesirow Financial announces the 2017 Packaging Perspectives Mid-Year newsletter featuring the company’s Investment Banking professionals’ perspectives on the latest trends and activities affecting the packaging M&A landscape. The report highlights a mid-year review of 2017, forecasts for 2018 and beyond, and offers other industry news.

Corporate M&A activity was strong in 2016, says the report. “Despite an uncertain and complex regulatory and geo-political environment (driven largely by “Brexit” and the contentious US presidential election), 2016 was the second strongest year for M&A activity since the most recent financial crisis.”

Deal flow in the plastics and packaging sector has mirrored the overall market, as the number of completed deals in the sector reflects recent annual trends. Looking toward the second half of 2017, Mesirow professionals believe the underlying market conditions driving M&A activity will remain healthy, and the primary near-term focus for many corporations will be generating growth through targeted acquisition strategies.

The competition for high quality assets has been amplified
as the market conditions driving M&A activity have remained
strong, notes the report. Consequently, historically high purchase multiples
have become commonplace. E.g., in the first half of
2017, the multiples paid for plastics and packaging
businesses have hovered near all-time high levels. This is said to be a direct result of both strategic and financial
buyers acquiescing to stringent investor demands for growth
and returns by aggressively pursuing assets that fit their
core competencies and investment criteria.

The newsletter says that, despite a competitive deal-making environment, private equity investors continue to be enamored with the plastics
and packaging sector. “Given that companies in this sector
typically serve a diverse set of end markets (food and beverage, healthcare, personal care, etc.), the cash flows
are generally viewed as more stable and reliable, thus more
attractive to private equity investors. As result, we expect overall private equity interest in the
plastics and packaging sector to remain healthy.”

Looking ahead to the second half of 2017, Mesirow expects M&A activity to continue at current levels. The fragmented yet consolidating flexible packaging industry has seen a consistently strong level of activity in the number of completed M&A transactions over the past 18 months.

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