Bemis Company, Inc. announced mid September that it is selling its global Pressure Sensitive Materials (MACtac) business to a California-based private equity firm, Platinum Equity, in order to raise $170 million in cash to fund the growth of its flexible packaging business. The sale is expected to close in the fourth quarter of 2014. Bemis actually agreed to sell MACtac already in 2002 for $420 million, then to UPM-Kymmene. The transaction was however blocked by the US Department of Justice.
Over the 12 years Bemis has probably focused on their core business, flexible packaging, and not invested in MACtac. They only managed to grow sales by about 10% over the 12 years, while operating profits were higher in 1998 - 2000 than the last many years. So a sale was overdue.
The selling price of $170 million represents a multiplication factor of about 5,5 on operating profit. The $420 million represents a factor of over 10. A strategic buyer like UPM-Kymmene would at the time have been able to gain an important presence on the North American market as well as access to technology they didn't have back then.
Timing, positive top and bottom line results and the right buyer is critical to get the best price for your company.
Over the 12 years Bemis has probably focused on their core business, flexible packaging, and not invested in MACtac. They only managed to grow sales by about 10% over the 12 years, while operating profits were higher in 1998 - 2000 than the last many years. So a sale was overdue.
The selling price of $170 million represents a multiplication factor of about 5,5 on operating profit. The $420 million represents a factor of over 10. A strategic buyer like UPM-Kymmene would at the time have been able to gain an important presence on the North American market as well as access to technology they didn't have back then.
Timing, positive top and bottom line results and the right buyer is critical to get the best price for your company.
