According to an 8K filed with the SEC, Wells Fargo served as administrative agent on a $900 million delayed draw term loan for Silgan Holdings, which was used to fund Silgan’s acquisition of the dispensing business of the Albéa Group.
The purchase price for the acquisition was $900 million, subject to adjustments outlined in the purchase agreement. Silgan funded the purchase price for the acquisition and related costs and expenses through term and revolving loan borrowings under its senior secured credit facility, including the $900 million delayed draw term loan.
This acquisition is expected to be modestly accretive to Silgan’s earnings in 2020, excluding the impact of required purchase accounting adjustments and after taking into consideration the company’s estimate of the current negative impact caused by the coronavirus (COVID-19) crisis on the beauty and personal care markets.
With this acquisition, Silgan expects to realize operational cost synergies of $20 million, on an annual run rate basis, within 18 months primarily through procurement savings, manufacturing efficiencies and reductions in general and administrative expenses. As a result, this acquisition is expected to become more accretive as synergies are phased in over the next 18 months and customer buying patterns for the beauty and personal care markets return to more normal levels. Silgan will update its earnings estimate for the full year 2020 for this acquisition and its recent debt financing transactions when it announces its earnings results for Q2/20 in July 2020.
Silgan is a supplier of sustainable rigid packaging solutions for consumer goods products with annual net sales, on a pro forma basis including the dispensing business of the Albéa Group acquired on June 1, 2020, of approximately $4.9 billion in 2019. Silgan operates 110 manufacturing facilities in North and South America, Europe and Asia.
Albéa Group is a supplier of highly engineered pumps, sprayers and foam dispensing solutions to consumer goods product companies primarily in the beauty and personal care markets. It operates a global network of 10 plants across North America, Europe, South America and Asia.