Consumer goods rigid packaging supplier Silgan Holdings has signed a binding offer to acquire Albea’s dispensing business in a $900m deal.
Operating ten plants across North America, Europe, South America and Asia, the company reported sales of approximately $383m for the fiscal year that ended in 2018.
With the proposed acquisition, Silgan is set to expand its position in the dispensing markets, which will include highly engineered foam pumps, fine mist pumps, lotion pumps, samplers, fragrance caps and closures for personal care and beauty products.
The proposed acquisition completion is subject to regulatory approvals and other customary conditions and is expected to take place in the first half of this year.
Silgan Holdings chairman and CEO Tony Allott said: “This proposed acquisition would significantly enhance the scope and breadth of our market-leading closures franchise by bringing new products and capabilities in the highly engineered dispensing category such as fine lotion dispensing solutions for skincare.
“This proposed acquisition would allow us to expand relationships and product offerings with global customers, bring new customer relationships and provide cost synergy opportunities of $20m. It would also create an incremental platform for growth and strongly enhance our free cash flow.”
Silgan hopes to sign a definitive purchase agreement with Albea and some of its subsidiaries once the required work is completed.
The company’s cash on hand and borrowings under its senior secured credit facility are expected to facilitate the proposed acquisition.
In April 2017, Silgan acquired WestRock’s dispensing systems business for $1.025bn.
Albea’s business specialises in manufacturing engineered pumps, sprayers and foam dispensing solutions for consumer goods product companies in the beauty and personal care markets.