Sealed Air Acquires Assets from Virox Technologies (revised)
The manufacturer of consumer and industrial packaging products, Sealed Air Corporation (SEE) has acquired the assets of Virox Technologies which includes its Accel brand, its healthcare businesses and existing customer relationships in the U.S. and Canada. Financial terms of the transaction were not disclosed.
Headquartered in Ontario, Canada, Virox mainly focuses on the use of Hydrogen Peroxide based products. Virox is dedicated to the development, optimization and adaptation of antimicrobial technology which helps in infection control.
Virox’s patented technology and Professional and Technical Services (PTS.TO) model will help in the expansion of germicidal technology and its successful application in the cleaning and disinfecting arena.
With an extended research work, Virox developed Accelerated Hydrogen Peroxide (AHP) technology, one of the major proprietary technologies. AHP is a patented, synergistic blend of safe ingredients. After mixing with low levels of hydrogen peroxide, these ingredients increase disinfecting and cleaning abilities. It also provides the exceptional benefits of speed of germicidal and cleaning efficiency.
Sealed Air is already connected to Virox through its Diversey Care business which provides integrated system solutions for facility hygiene, food safety and security and infection control.
Virox’s PTS model after combining with Diversey Care’s sales coverage, application expertise and global distribution will facilitate the expansion of AHP- based solutions in the Oxivir brand worldwide. The acquisition will also enhance Diversey Care’s marketing of AHP technology to the broader institutional markets like Education, Government, Facility Management, Retail and Food Service.
The buyout will help Diversey Care to gain leadership position in the U.S. and Canada as infection prevention resource to healthcare professionals. However, the transaction will not have immediate impact on consolidated financial position in the near term.
The acquisition is an important step for Sealed Air’s growth in the health care market. The outlook for growth of the global health care sector over the next few years is generally positive. Emerging markets are expected to see spending increase, due to population growth, increasing consumer wealth, and government programs to expand access to health care.
In the U.S. growth in the health care market will be driven by expanded access to health insurance coverage through the Affordable Care Act (ACA or Obamacare) and Medicaid. However, there remain challenges regarding ACA implementation, including the troubled rollout of the federally operated health insurance exchange.
Going forward, Sealed Air will benefit from cost savings from its ongoing Integration & Optimization Program as well as its restructuring plan. However, economic uncertainty, unfavorable foreign currency translation and volatility in raw material prices will continue to affect its results in 2014.
Elmwood Park, NJ-based Sealed Air is a major specialty packaging service provider to a diverse range of end markets. The company operates in the United States and in 50 other countries, producing packaging and performance-based materials, and equipment systems serving food, medical, industrial and consumer applications.
Sealed Air carries a Zacks Rank #1 (Strong Buy).
Some favorably ranked stocks in the same industry include Graphic Packaging Holding Co. ((GPK) MeadWestvaco Corporation (MWV) and Sonoco Products Co. (SON). All these carry a Zacks Rank #2 (Buy).
(We are reissuing this article to correct a mistake. The original article, issued earlier today, July 3, 2014, should no longer be relied upon.)Read the Full Research Report on SEE
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