Novolex® and Pactiv Evergreen Inc. (NASDAQ: PTVE) have announced today the signing of a definitive agreement to merge, forming a premier manufacturer of food and drink packaging, along with specialty packaging products.
This strategic combination integrates two highly complementary businesses, resulting in a comprehensive product platform that establishes one of the packaging industry’s most diverse substrate offerings. The newly formed entity will benefit from an extensive manufacturing presence and a vast distribution network. This enhancement is crucial for meeting the diverse needs of customers, from prominent blue-chip brands to smaller businesses catering to millions of consumers daily.
“This transaction reflects the continuation of our long-term growth strategy to create the industry’s most innovative, sustainable, and customer-focused company,” stated Stan Bikulege, Chairman and CEO of Novolex. “Pactiv Evergreen’s robust product portfolio, alongside their skilled team, will significantly enhance Novolex’s diverse packaging solutions. Both companies are dedicated to customer success, exhibit a strong entrepreneurial spirit, and share core values of integrity, collaboration, and excellence. Our commitment to our employees remains steadfast, and we aim to develop a best-in-class, high-growth platform. We eagerly anticipate continuing our growth journey and believe this partnership will fortify the future of food and drink sustainable packaging.”
Michael King, President and CEO of Pactiv Evergreen, expressed, “We are pleased to reach this agreement with Novolex, who shares our commitment to product quality and recognizes our potential for future growth. The Board and leadership team assessed various opportunities and are confident this transaction will maximize shareholder value and is the optimal path forward for all stakeholders. This milestone reflects our talented employees and the intrinsic value of Pactiv Evergreen. Over the past three years, we have made substantial progress in our transformation, focusing on our core strengths while enhancing profitability and operational excellence. We are excited to embark on this next chapter.”
“Both Novolex and Pactiv Evergreen cater to appealing end markets. Each company has significantly improved its operations in recent years, reinforcing its focus on product innovation and sustainability leadership,” said Rob Seminara and Peter Sinensky, Partners at Apollo. “As the packaging industry evolves, the combination of these two exceptional teams will better position the new entity with enhanced capabilities to meet changing consumer demands and deliver top-quality products and services.”
“We are glad to support this transformative merger between Novolex and Pactiv Evergreen,” remarked Sam Blaichman, Managing Director at CPP Investments. “We look forward to collaborating with Apollo and the management team to realize the potential of the combined entity.”
Compelling Strategic Combination and Financial Rationale
- Offers increased options with over 250 brands and 39,000 combined SKUs, creating one of the most diverse substrate portfolios in the packaging arena, featuring various fiber types, resin, and post-consumer recycled content.
- Enhances customer service for leading household brands in grocery, retail, quick- and full-service restaurants, foodservice, and industrial sectors.
- Accelerates product innovation by merging expertise in materials science, R&D, and customizable product development to address evolving customer needs for convenient, durable, and user-friendly packaging.
- Expands service and distribution capabilities via a wide manufacturing footprint across the U.S., Canada, and Mexico.
- Continuously enhances the commitment to sustainability through greater resources for R&D focused on recyclable, compostable, and reusable packaging, supported by enterprise-wide emission reduction targets to mitigate environmental impact.
Transaction Details
According to the agreement, Novolex will acquire Pactiv Evergreen for $18.00 per share, resulting in an all-cash transaction valued at $6.7 billion, inclusive of Pactiv Evergreen’s net debt as of September 30, 2024. This transaction consideration represents a 49% premium over the two-month unaffected volume-weighted average trading price as of December 2, 2024, the last trading day before media reports regarding a potential transaction. Upon completion, Pactiv Evergreen will transition into a privately held company, and its common stock will no longer trade on Nasdaq. The combined entity will be led by Stan Bikulege, Chairman and CEO of Novolex.
This transaction enjoys the backing of funds managed by affiliates of Apollo (the “Apollo Funds”), which has been the majority shareholder of Novolex since 2022, alongside Canada Pension Plan Investment Board (“CPP Investments”), which will contribute approximately US$1 billion and become a significant minority shareholder in the merged company.
The Pactiv Evergreen Board of Directors has approved the transaction, subject to regulatory approvals and customary closing conditions. The transaction has also received the endorsement of Packaging Finance Limited, as the majority shareholder of Pactiv Evergreen, negating the need for additional shareholder approval. This transaction is not contingent on financing and is expected to close in mid-2025.
Advisors
Barclays Bank PLC serves as lead financial advisor, with Paul, Weiss, Rifkind, Wharton & Garrison LLP providing legal advice to Novolex. Morgan Stanley & Co. LLC and RBC Capital Markets, LLC also serve as financial advisors. Financing will be facilitated by Wells Fargo Bank NA, UBS Investment Bank, Barclays Bank PLC, RBC Capital Markets, LLC, and Morgan Stanley Senior Funding, Inc.
Goldman Sachs & Co. LLC and Lazard Frères & Co. LLC are acting as financial advisors to Pactiv Evergreen, with Paul Hastings LLP serving as its legal advisor.
For more information about Novolex, please visit www.novolex.com.
