Packaging Mergers & Acquisitions: Drivers, Deals & Outlook. Nicholas Mockett October 2017

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2 Packaging Mergers & Acquisitions: Drivers, Deals & Outlook Nicholas Mockett October 2017

3 Introduction Moorgate Capital is an independent Corporate Finance firm specialising in: Mergers, Acquisitions & Disposals Buy Outs Capital Raising Strategic Advice Public Company Advice & Fairness Opinions Clients include multinational public companies, leading financial sponsors, private companies, family offices, management teams, banks and state owned enterprises. Clients benefit from: Focus on upper mid market: Enterprise Value US$50m US$1bn Our investment in long term relationships Lack of conflicts of interest Deep sector knowledge globally Industry specific Panel of Senior Advisers 3

4 Key Contacts Sir Peter Heap Chairman Tel: Sir Peter was with the Foreign & Commonwealth Office of the British Government for over 30 years, including being the Ambassador in Brazil, Senior Trade Commissioner in Hong Kong, British High Commissioner, Bahamas, as well as the Head of Energy Department. Subsequently he worked full time with HSBC Investment Bank, and as Senior Adviser, NED or Chairman of a number of other companies including Amerada Hess and BOC Group. Sir Peter is Chairman Emeritus of the Brazilian Chamber of Commerce in Great Britain. Nicholas Mockett nmockett@moorgate-capital.com Partner Packaging, Plastics & Paper Tel: Nick has focused on the Packaging, Plastic & Paper related industries for over twenty years and his experience includes disposals, acquisitions and leveraged buy outs. He has advised on several billion Dollars of transactions. Prior to Moorgate Capital he spent 4 years with Europa Partners and 8 years with PwC Corporate Finance where he was Sector Leader for the PPP industry. Nick is a Liveryman of the Worshipful Company of Stationers& Newspaper Makers, a Freeman of the Worshipful Company of Horners, a serial judge of Packaging News Awards, and a member of the Editorial Board of Plastics in Packaging. 4

5 Packaging M&A 1. Industry overview & global packaging M&A 2. Plastic packaging M&A 3. Recent Deal Activity 4. Outlook for M&A 5

6 Packaging M&A 1. Industry overview & global packaging M&A 2. Plastic packaging M&A 3. Recent Deal Activity 4. Outlook for M&A 6

7 Packaging M&A: deal volume

8 Packaging M&A: deal value $ 40 bn $ 35 bn $ 30 bn $ 25 bn $ 20 bn $ 15 bn $ 10 bn $ 5 bn $ 0 bn

9 Packaging M&A: deal volume by buyer & seller type Buyer type Seller type 17% 18% 39% 65% 18% 19% 24% Strategic 65% PE platform 18% PE add on 17% Paper 39% Rigid Plastic 24% Flexible Plastic 19% Other (glass, can, etc.) 18% Plastic 43% 9

10 Deal target locations 100% 80% 20% 15% 25% 25% 20% 20% 20% 20% 30% 25% BRIC Packaging M&A Brazil 5% Russia 5% India 10% China 25% Other 55% 60% 40% 80% 85% 75% 75% 80% 80% 80% 80% 70% 75% 20% 0% Developed Markets Emerging Markets 10

11 EV/EBITDA multiples Public packaging companies Paper packaging Plastic packaging 12x 10,8x 11,0x 10x 8x 9,0x 7,4x 7,5x 8,0x 7,0x 9,0x 8,8x 9,8x 10,2x 8,5x 8,4x 9,3x 6x 4x 2x 0x

12 Deal valuations: EV/EBITDA packaging transactions Packaging M&A transactions 9x 8x 7x 8,1x 6,9x 6,5x 6,9x 7,0x 6,8x 7,4x 7,7x 8,0x 6x 5,9x 5x 4x 3x 2x 1x 0x

13 Comparative share price performance 10 year performance PACKAGING % PHARMA % FTSE % CONSTRUCTION % Note: Packaging: Dow Jones U.S. Containers & Packaging Index (INDEXDJX:DJUSCP) Pharma: NYSE ARCA PHARMACEUTICAL INDEX (INDEXNYSEGIS:DRG) FTSE 100: FTSE 100 (INDEXFTSE:UKX) Construction: Dow Jones U.S. Home Construction Index (INDEXDJX:DJUSHB) Automobiles: FTSE350 Automobiles & Parts Index (INDEXFTSE:NMX3350) AUTOMOBILE -1.3 % 13

14 Packaging M&A 1. Industry overview & global packaging M&A 2. Plastic packaging M&A 3. Recent Deal Activity 4. Outlook for M&A 14

15 Global plastic packaging M&A by acquiror Number of deals 140 Strategic Financial % % 44% 39% 42% 45% 40% 38% 39% 80 42% 43% 60 77% % 57% 56% 61% 58% 55% 60% 58% 62% 61%

16 Global plastic packaging M&A by segment Number of deals 140 Flexible Rigid Caps & Closures Bottles % 9% 15% 9% 11% 10% 10% 80 42% 6% 42% 36% 60 31% % 48% 38% 44%

17 Plastics trading multiples Public companies 20 x 18 x 16 x % 14 x 12 x 10 x % % -8 % + 20 % 8 x 6 x + 17 % 4 x 2 x 0 x Automotive Cable & wire Machinery Materials Rigid packaging Building products Flexible packaging Medical 17

18 Packaging M&A 1. Industry overview & global packaging M&A 2. Plastic packaging M&A 3. Recent Deal Activity 4. Outlook for M&A 18

19 Recent deals Date Target Acquirer Value Jan 17 $ 2.3 bn Jan 17 n.d. Feb 17 $ 0.84 bn Jul 17 Labels $ 1.3 bn Aug 17 $ 1.5 bn 19

20 Packaging M&A 1. Industry overview & global packaging M&A 2. Plastic packaging M&A 3. Recent Deal Activity 4. Outlook for M&A 20

21 Deal drivers Macro trends: 1. Growing population & middle class 2. Ageing population 3. Growing protein demand $ Micro trends: Single people households Working mothers Urbanisation Shopping locally LOCAL Smaller pack sizes Convenience & on the go Internet retailing Branding Health conscious Environmental influence Packaging is a solution: it saves resources, extends freshness & reduces waste 21

22 Outlook 22

23 Private Equity dry powder $ 900 bn $ 800 bn $ 700 bn $ 600 bn $ 500 bn $ 400 bn $ 300 bn $ 200 bn $ 100 bn $ 0 bn

24 Recession? 24

25 Summary Macro and micro indicators remain strong Strong M&A activity Activity from both strategic and financial acquirors Valuations and stock market performance strong Low cost of capital, driving deals Recession? 25

26 Moorgate Capital 33 St James s Square London SW1Y 4JS nmockett@moorgate-capital.com 26

27 Disclaimer The statements herein have been taken from sources we believe to be reliable but such statements are made without any representation as to accuracy or completeness or otherwise. Any opinion or forecast constitutes our judgment as at the date of issue and is subject to change without notice. Moorgate Capital(Corporate Finance) Ltd 27