Wendel has signed an agreement to sell Constantia Flexibles ("The Company"), a global leader in flexible packaging, to a partner of One Rock Capital Partners, LLC ("One Rock"). Constantia Flexibles produces flexible packaging solutions for a diverse portfolio of well-known customers and local market leaders in the consumer goods and pharmaceutical sectors.
The business would be sold at a price that would provide Wendel with net proceeds1 of approximately €1,097 million - representing 1.94 times Wendel's total investment in Constantia Flexibles since 2015.
The net proceeds from the Transaction are €84 million higher than the valuation of Constantia Flexibles in Wendel's net asset value ("NAV") published prior to the announcement of the Transaction, i.e. as at 31 March 2023. Additional proceeds could be generated from the sale of current assets of the company, bringing the proceeds to €1,124 million. This represents a valuation of 11.0% above NAV as at 31 March 2023 and 6.8% above NAV as at 30 June 2023.
The transaction is expected to close in the second half of 2023, subject to the fulfilment of contractual conditions, including regulatory approvals.
David Darmon, Deputy CEO of Wendel Group, said: "Constantia Flexibles' history within Wendel's portfolio demonstrates the legitimacy of our long-term investor model, which has enabled us to support the company's development. Constantia Flexibles has placed innovation at the heart of its growth model, enabling it to meet the challenges of the circular economy without neglecting the functional requirements of its products. Under the leadership of Pim Vervaat, all Constantia Flexibles teams have demonstrated their commitment and resilience during the Covid 19 crisis, excelling in dealing with the recent challenges in the energy and commodity markets. The teams have enabled the company to deliver outstanding operational, financial and non-financial performance."
Pim Vervaat, CEO of Constantia Flexibles, affirms: "Wendel's commitment and dedication have contributed significantly to our current success and position. We are grateful for their supportive partnership over the years, which has enabled our growth and investment in our workforce, innovation and sustainable offerings for the consumer and pharmaceutical markets. It has been a pleasure to work with Wendel."
The story of Wendel's investment in Constantia Flexibles
On 27 March 2015, Wendel completed the acquisition of Constantia Flexibles, at an enterprise value of €2.3 billion. Wendel invested 640 million euros in equity, giving it a 73% stake in the company. The AREPO Foundation participated with 240 million euros and thus acquired a 27% share. On 22 September 2015, Wendel signed an agreement with Maxburg Capital Partners (MCP), an investment company backed by the RAG Foundation, to syndicate a minority stake in its investment in Constantia Flexibles. In November 2015, MCP acquired approximately 11% of Constantia Flexibles' capital from Wendel for €101 million. Following this transaction, Wendel, AREPO Foundation and MCP participated in a €50 million capital increase for Constantia Flexibles, each taking a pro-rata share to fund the Afripack and Pemara acquisitions. After the capital increase and MCP's investment, Wendel's equity stake in Constantia Flexibles amounted to €565 million. Wendel is the majority shareholder of the company and holds 60.8% of the share capital.
In 2017, Constantia Flexibles sold its Labels business to Multi-Color Corporation. This value-enhancing transaction provided the company with additional resources to strengthen its growth strategy in the flexible packaging market - where it is a leader in segments such as conversion films, die-cut lids, aluminium container systems and pharmaceutical films.
During his ownership, Wendel supported Constantia Flexibles in its external growth strategy with 11 acquisitions in 10 countries.
ESG successes since 2015
For more than eight years, Wendel has supported Constantia Flexibles in its ESG challenges, particularly in the areas of circular economy and climate protection. As a result, the Austrian company has had an SBTi approved greenhouse gas emissions reduction strategy since 2018. 85% of its products are recyclable or have a recyclable alternative. Occupational safety has always been a top priority for Wendel. Therefore, special attention has been paid to this issue, which has led to continuous improvements. The accident frequency rate decreased from 13.4 in 2014 to 2.2 in 2022.
The relevance of the extensive work done by Wendel and Constantia Flexibles is reflected in the group's excellent extra-financial ratings. The company received an A- rating from CDP and the gold medal from Ecovadis, placing Constantia Flexibles in the top 2% of companies in its industry.
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