Wired News – Newell Brands Divests Global Packaging Business to Novolex as Part of Transformation Plan
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LONDON, UK / ACCESSWIRE / May 08, 2018 / If you want access to our free research report on Newell Brands Inc. (NYSE: NWL), all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=NWL as the Company's latest news hit the wire. On May 04, 2018, the Company announced that it has signed an agreement to divest The Waddington Group ("TWG") to Novolex Holdings, LLC ("Novolex"). TWG is the global consumer and commercial package manufacturing business of Newell Brands, while Novolex is a leading manufacturer of plastic and paper packaging products in North America and a portfolio Company of the global investment firm, The Carlyle Group. Register today and get access to over 1,000 Free Research Reports by joining our site below:
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Quotes from Management
Commenting on the divestment, Michael Polk, Chief Executive Officer (CEO) of Newell Brands, said:
"This mutually beneficial deal allows the Waddington team to unlock its full potential under a new owner who is committed to the packaging category, and provides Newell Brands the opportunity to take an important first step forward in our Accelerated Transformation Plan."
Stan Bikulege, Chairman and CEO of Novolex, added:
"The Waddington Group has long been our top acquisition target. The Company brings Novolex world-class product innovation, long-term customer relationships, and, most importantly, adds to our talented and dedicated team."
Wes Bieligk, Principal, The Carlyle Group, stated:
"This acquisition illustrates our meaningful commitment to Novolex's growth plans. We have great confidence in Stan and his team."
Details of the Divestment
As per the terms of the agreement, Novolex has agreed to pay approximately $2.3 billion for TWG. The consideration is subject to working capital adjustments and transaction costs at the time of closing of the deal. Newell Brands expects to realize approximately $2.2 billion after tax deductions from the divestment. Newell Brands plans to utilize the funds from the sale proceeds to pay off its debt and for financing share buybacks.
Newell Brands expects to close the deal within 60 days of the signing of the agreement, subject to getting requisite regulatory approvals and fulfilment of closing conditions.
The divestment of TWG is part of the Transformation Plan announced by Newell Brands in January 2018, which outlined the various steps and measures to improve operational performance of Newell Brands and increase value for its shareholders. The Company planned to focus on its core nine divisions and divest non-core businesses. Newell Brands planned to utilize the sales proceeds to pay off existing debts, finance share buybacks, and pay higher dividends.
Newell Brands had been under pressure from hedge fund investor Starboard Value LP and activist investor Carl C. Icahn of Icahn Enterprises, LP, to improve operational performance and creating value for its shareholders.
About The Waddington Group
Covington, Kentucky-based TWG is a global manufacturer and marketer of packaging and disposables serving the foodservice, bakery, deli, produce, and confectionery markets. It has four major business divisions, namely WNA Inc., Eco-Products Inc., POLAR PAK Inc., and Waddington Europe. WNA produces upscale disposable plastic products; Eco-Products is the leader in the green packaging space; POLAR PAK® offers a wide range of containers, serving ware, drink-ware, and cutlery; and Waddington Europe manufactures customized thermoformer of packaging and transit trays, and represents TWG in Europe.
TWG's net sales were approximately $907 million for FY17. TWG's operations include 16 sites across the US, Canada, Ireland, The Netherlands, and the UK, and is supported by a team of approximately 3,000 employees worldwide.
Impact on Novolex
The acquisition of TWG is highly complementary to Novolex's existing business. TWG had been identified as a top acquisition target by Novolex and had been on its wish-list for a long time. This is the eighth major acquisition by Novolex since 2012, and the acquisition is expected to expand its product portfolio, geographic footprint, and customer base. On completion of the deal, John Wurzburger, CEO of TWG, and his team will join the Novolex team. Once the deal is completed, Novolex will have over 10,000 employees and 62 manufacturing plants worldwide. The funds for the acquisition of TWG will come from Carlyle Partners VI, a $13 billion US buyout fund.
About Novolex Holdings LLC
Hartsville, South Carolina-based Novolex is a leading manufacturer of paper and plastic flexible packaging products for customers in the foodservice, grocery, retail, and commercial businesses. Some of the Company's leading brands include Hilex Poly®, Duro Bag®, Bagcraft® Packaging, De Luxe® Packaging, General Packaging Products, International Converter, Shields®, Heritage® Bag, and Burrows Packaging™. The Company's operations include 46 facilities across North America and one in Europe. It employs nearly 7,300 people.
About The Carlyle Group
The Carlyle Group is a global alternative asset manager which invests in Corporate Private Equity, Real Assets, Global Credit, and Investment Solutions. The Company has expertise in various industries, including aerospace, defense & government services, consumer & retail, energy, financial services, healthcare, industrial, real estate, technology & business services, telecommunications & media, and transportation. The Company invests in Africa, Asia, Australia, Europe, the Middle-East, North America, and South America. It had over $201 billion of assets under management as of March 31, 2018, and is supported by a team of 1,575 people.
About Newell Brands Inc.
Hoboken, New Jersey-based Newell Brands is a global consumer goods Company with a portfolio of brands that includes Paper Mate®, Sharpie®, Dymo®, EXPO®, Parker®, Elmer's®, Coleman®, Jostens®, Marmot®, Rawlings®, Oster®, Sunbeam®, FoodSaver®, Mr. Coffee®, Rubbermaid Commercial Products®, Graco®, Baby Jogger®, NUK®, Calphalon®, Rubbermaid®, Contigo®, First Alert®, and Yankee Candle®.
Stock Performance Snapshot
May 07, 2018 - At Monday's closing bell, Newell Brands' stock was marginally down 0.25%, ending the trading session at $27.58.
Volume traded for the day: 5.71 million shares.
Stock performance in the last month – up 6.94%; and previous three-month period – up 5.59%
After yesterday's close, Newell Brands' market cap was at $13.46 billion.
Price to Earnings (P/E) ratio was at 9.31.
The stock has a dividend yield of 3.34%.
The stock is part of the Consumer Goods sector, categorized under the Housewares & Accessories industry. This sector was up 0.1% at the end of the session.
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