European bottler of soft drinks and fruit juices Refresco Group has agreed to buy US-based bottler Whitlock Packaging for $129m on a debt and cash free basis.
As part of Refresco's buy and build strategy, the deal will expand the company’s addressable market and increase its co-packing volumes from 25% to 34% of total group volume of six billion litres.
Once completed, the deal will witness more than 80% overlap in Whitlock Packaging's co-packing customer base and Refresco.
The deal represents an adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) multiple of 7.3x and is in accordance with the average multiple paid by Refresco on earlier transactions.
Refresco Group CEO Hans Roelofs said: "For some time we have been carefully exploring opportunities to enter the North American market and create a second platform for growth.
"Whitlock Packaging adds a new and exciting platform for growth for Refresco in North America. About 80% of the customers of Whitlock Packaging are already customers of Refresco in Europe.
“As such, Whitlock Packaging offers the opportunity to grow in a new market alongside existing customers, while offering them similar and reliable supply chain solutions as we do in Europe."
Refresco has production facilities in Belgium, the Netherlands, Luxembourg, France, Germany, Iberia, Italy, the UK, Poland and Finland.
In February, the company signed an agreement to acquire PepsiCo’s bottling facility in Hamburg, Germany.