Sealed Air has signed a definitive agreement to acquire US-based automated bagging systems manufacturer Automated Packaging Systems (APS) for a total consideration of $510m.
To be executed on a cash and debt-free basis, the proposed acquisition will allow Sealed Air to broaden its portfolio to drive growth in the e-commerce, fulfilment and food packaging markets.
The transaction is also anticipated to extend its leading automation, direct service expertise and total systems approach.
Sealed Air will be able to leverage cross-selling opportunities that will yield additional growth in key markets.
The company also expects to achieve cost synergies from supply chain efficiencies.
Founded in 1962, APS is a supplier of full flexible packaging systems, including equipment, sustainable materials and technical services. Its portfolio includes Autobag bagging machines, pre-opened bags on a roll, and three recycled film solutions under the EarthAware brand.
Sealed Air president and CEO Ted Doheny said: “APS is a market leader with unique and innovative solutions, complete with automated equipment, materials and services.
“This transaction expands the breadth of our automated solutions and sustainable packaging offerings, giving us access to growth opportunities in the markets we serve.
“We are confident that the APS business will thrive as part of our platform, given our global reach, distribution network and supply chain operations.”
The company noted that the transaction is anticipated to be accretive to adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) this year.
The acquisition will also help Sealed Air to expand protective packaging with complementary solutions and services.
APS will add complementary and additive capabilities, including expertise in engineering, automation technology and sustainability.
The deal is in line with Sealed Air’s Reinvent SEE goal of double its innovation rate over the next five years.
Subject to regulatory approval and customary closing conditions, the completion of the transaction is expected to take place in the third quarter of this year.
Earlier this year, Sealed Air purchased Philippines-based producer MGM to expand food packaging operations in Asia.