Sealed Air Corp (NYSE: SEE) said Wednesday that it will acquire Automated Packaging Systems, an Ohio-based manufacturer of automated bagging systems, for $510 million in cash.
Sealed Air said it plans to use cash on hand and credit facilities to finance the purchase of APS.
Sealed Air, the maker of Bubble Wrap, said that APS has more than 1,200 employees, customers in over 60 countries and annual sales in 2018 of $290 million.
The deal brings "highly complementary and additive capabilities" to Sealed Air, according to Wednesday's announcement. The company said APS will bring cross-selling opportunities that enable additional growth in key markets.
The transaction is expected to be accretive to Sealed Air's adjusted EBITDA in 2019.
Why It's Important
"Automated Packaging Systems is a market leader with unique and innovative solutions, complete with automated equipment, materials and services," Ted Doheny, Sealed Air President and CEO, said in a statement.
"The addition of APS is well aligned with our Reinvent SEE goal of doubling our innovation rate over the next five years. This transaction expands the breadth of our automated solutions and sustainable packaging offerings, giving us access to growth opportunities in the markets we serve."
The acquisition is expected to close early in the third quarter of 2019 and is contingent upon regulatory review and customary closing conditions, according to Sealed Air.
Once the transaction closes, Sealed Air said it will update its 2019 full-year outlook on its second-quarter call, tentatively scheduled for July 31.
Sealed Air shares were down 5.21 percent at $44.19 at the time of publication Wednesday.
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