BMO Capital Markets Reviews M&A in Packaging

CHICAGO—BMO Capital Markets, the investment and corporate banking arm of BMO Financial, has released its fifth annual report on packaging mergers and acquisition (M&A) activity, entitled “Mergers and Acquisitions in the Packaging Industry: 2009 Annual Deal Review.”

The report provides a comprehensive review of M&A in the packaging industry in North America, as well as on a global basis over the last several years. The report provides an overview of reported M&A activity in 2009, examining M&A activity by sector, geography, acquirer type, size, and valuations. The report also provides a brief synopsis of each transaction announced during the year and examines packaging M&A trends over the last several years.

“The last year was the most challenging year for M&A activity in the packaging industry in recent history, affecting deal volume, valuations, and interest among all types of acquirers,” says Doug Lawson, managing director and head of BMO Capital Markets packaging practice. “The challenging M&A market conditions that characterized 2008 worsened in 2009. The credit crisis and difficult economic environment resulted in a significant slowdown in packaging M&A activity among strategic and financial acquirers. However, the challenging conditions that plagued 2008 and 2009 have begun to improve and we believe that positive packaging industry fundamentals and the strong rationale for consolidation in the packaging sector will begin to spur a recovery in deal activity in 2010.”

The report includes an analysis of the 2009 Global M&A volume decline from the ten-year low of 2008. There were 169 announced transactions in 2009, a decline of 33 percent from the 251 announced transactions of 2008 and a 56 percent decline from the record setting level of 386 at the peak of the M&A market in 2007.

The report also outlines the ways in which M&A activity weakened across all regions of the world. Europe and North America continued to remain as the two largest regions for deal activity worldwide, with 41 percent and 40 percent of deals in 2009, respectively. However, year-over-year, transaction volume fell across all regions worldwide. Despite being one of the most active regions worldwide for packaging M&A activity, North American packaging deal volume declined 19 percent with 16 fewer transactions in 2009 (69 deals) than 2008 (85 transactions).