Blog Coverage WestRock Completed Divestment of its Home, Health, and Beauty Business to Silgan Holdings

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LONDON, UK / ACCESSWIRE / April 10, 2017 / Active Wall St. blog coverage looks at the headline from paper and packaging giant WestRock Co. (NYSE: WRK) as the Norcross, Georgia-based Company announced on April 06, 2017, that it had successfully completed the sale of its Home, Health, and Beauty Business to Silgan Holdings Inc. (NASDAQ: SLGN). The deal is valued at $1.025 billion in cash plus assumption of approximately $25 million in foreign pension liability. Register with us now for your free membership and blog access at:

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One of WestRock's competitors within the Packaging & Containers space, Crown Holdings, Inc. (NYSE: CCK), will release its earnings for Q1 ended March 31, 2017 after the close of trading on the NYSE on Wednesday, April 19, 2017. AWS will be initiating a research report on Crown Holdings in the coming days.

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WestRock plans to use the funds realized from the stake sale to finance its acquisition of Multi Packaging Solutions International Limited (NYSE:MPSX) ("MPSIL"), announced in January 24, 2017.

WestRock plans to disclose the financial impact of the deals on the Company during Q2 FY17 earnings call planned for April 26, 2017.

Details of Deal - Sale of Home, Health, and Beauty Business

WestRock had initially announced the sale of its Home, Health, and Beauty Business to Silgan Holdings on January 23, 2017. The business consisted of the designing and production of dispensing systems and closures (including triggers, pumps, sprayers and dispensing closure solutions) for home care, lawn and garden, personal care, beauty, fragrance, and healthcare markets. The Company had made a number of acquisitions in the last one year. The divestment was part of WestRock's business strategy to exit from non-core businesses and focus on their main paper and packaging business.

Silgan Holdings planned to finance the $1.025 billion cash (subject to post-closing adjustments) plus $25 million in foreign pension liability through a mix of revolving credit facility including a $800 million term loan. The acquisition will be accretive to earnings of Silgan Holdings and also accretive to free cash flow per share. Silgan Holdings expects the deal to realize cost synergies of $15 million annually within 24 months of the finalization of the deal. Silgan Holdings will also be updating its earnings guidance for FY17 and the financial impact of the deal during its announcement of its Q1 2017 results on April 26, 2017.

About the acquirer – Silgan Holdings

Stamford, Connecticut based Silgan Holdings was founded in 1987 and is a leading supplier of rigid packaging for shelf-stable food and other consumer goods products. It manufactures metal containers, metal, composite, and plastic closures and plastic containers etc. for leading brands like Campbell's Soup, Del Monte Fruits and Vegetables, Listerine and Friskies Pet Food. Silgan Holdings operates 100 manufacturing facilities in North and South America, Europe and Asia and its annual net sales for FY16 was approximately $3.6 billion.

Details of Deal – Acquisition of Multi Packaging Solutions International Ltd

WestRock announced the acquisition of New York based MPSIL, a global leader of print based packaging solutions including premium folding cartons, inserts, labels, and rigid packaging for the branded and healthcare markets, on January 24, 2017. WestRock agreed to pay $18.00 per share in cash plus take over $873 million debt of MPSIL. The total enterprise value of the transaction is $2.28 billion.

WestRock plans to use a mix of cash on hand and debt to finance the deal. WestRock also plans to refinance MPSIL's existing debt once the transaction is completed.

With the acquisition of MPSIL, WestRock will be able to expand its product offerings and offer its customers a discerning portfolio of paper and packaging solutions. The deal is expected to boost WestRock's exposure to the growing healthcare, spirits, confectionery and cosmetics markets. The deal will also help WestRock strengthen its position in the European markets and become the second largest US packaging Company in Europe.

The integration of MPSIL's business with WestRock will lead to run-rate synergies of over $85 million by end of FY19. WestRock expects the transaction to close in Q3 2017 subject to closing conditions and receipt of regulatory approvals. MPSIL's two majority shareholders who have 57% stake in the Company have already agreed to vote in favor of the deal.

Stock Performance

At the close of trading session on Friday, April 07, 2017, WestRock's share price finished the trading session at $51.08, sliding 1.52%. A total volume of 1.34 million shares exchanged hands. The stock has soared 9.33% and 42.03% in the last six months and past twelve months, respectively. Furthermore, since the start of the year, shares of the Company have gained 1.36%. The stock is trading at a PE ratio of 65.32 and has a dividend yield of 3.13%. The stock's market capital stands at $12.99 billion based on its Friday's closing price.

Last Friday, Silgan Holdings' shares closed at $57.81 with a marginal dip of 0.84%. Approximately 228.24 thousand shares exchanged hands by the end of the day's trade. The stock gained 10.68% in the last quarter and 11.65% in the last 12 months. Year-to-date, the stock performance registered a 13.29% growth. The stock is trading at a PE ratio of 22.80 and has a dividend yield of 1.25%. At Friday's closing price, the stock has a market cap of $3.21 billion.

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