Mazzone & Associates Featured in Label & Narrow Web’s 2025 Mid-Year Economic Report
Mazzone & Associates is pleased to share that Managing Director Jonathan White and Director Stuart Sanford were featured contributors to Label & Narrow Web’s 2025 Mid-Year Economic Report. Their section, The Shifting Landscape in Label M&A, offers perspective on how evolving market conditions are influencing deal activity and valuations in the label industry.
In their commentary, Jonathan and Stuart highlighted:
Shifts in overall M&A activity and valuation trends within the label sector.
The evolving role of financial sponsors and rollup strategies in driving consolidation.
Broader market dynamics and economic factors influencing deal flow going forward.
Their insights reflect Mazzone & Associates’ deep expertise advising clients across the packaging, labels, and broader industrial sectors.
Read the full report here: Mid-year Economic Report – Label & Narrow Web
Mazzone & Associates is pleased to share that Managing Director Jonathan White and Director Stuart Sanford were featured contributors to Label & Narrow Web’s 2025 Mid-Year Economic Report. Their section, The Shifting Landscape in Label M&A, offers perspective on how evolving market conditions are influencing deal activity and valuations in the label industry.
In their commentary, Jonathan and Stuart highlighted:
Shifts in overall M&A activity and valuation trends within the label sector.
The evolving role of financial sponsors and rollup strategies in driving consolidation.
Broader market dynamics and economic factors influencing deal flow going forward.
Their insights reflect Mazzone & Associates’ deep expertise advising clients across the packaging, labels, and broader industrial sectors.
Read the full report here: Mid-year Economic Report – Label & Narrow Web
Packaging Market Update - May 2025
Over the last week, members of Mazzone’s packaging team attended the ARC Executive Flexible Packaging Summit hosted at MxD in Chicago as well as “The Future of Packaging” conference hosted by Smithers and LEK Consulting – also in Chicago. Across these events and the last month, our team met with industry players across the supply chain from packaging converters, equipment / system providers, substrate and input producers, distributors and automation service providers. Below, we share our observations on today’s flexible packaging market.
The packaging M&A market entered 2025 with enthusiasm and anticipation for a high volume of transactions; however, this expectation has been muted given recent U.S. trade policies and general market uncertainty. No negative impact is yet visible in the Packaging M&A deal data through April 2025, however, we do anticipate closings to slow in the near-term for certain players.
Over the last week, members of Mazzone’s packaging team attended the ARC Executive Flexible Packaging Summit hosted at MxD in Chicago as well as “The Future of Packaging” conference hosted by Smithers and LEK Consulting – also in Chicago. Across these events and the last month, our team met with industry players across the supply chain from packaging converters, equipment / system providers, substrate and input producers, distributors and automation service providers. Below, we share our observations on today’s flexible packaging market.
The packaging M&A market entered 2025 with enthusiasm and anticipation for a high volume of transactions; however, this expectation has been muted given recent U.S. trade policies and general market uncertainty. No negative impact is yet visible in the Packaging M&A deal data through April 2025, however, we do anticipate closings to slow in the near-term for certain players.
April YTD 2025 North America Packaging Converter M&A Transaction Trends (as of May 2025):
M&A Volume Trends: Contrary to expectations of continued decline, packaging M&A activity in 2024 remained resilient, with 2025 continuing that momentum. Year-to-date deal volume through April 2025 is up from 2024, driven largely by private equity platforms and add-ons. This divergence from broader market data likely reflects our inclusion of smaller transactions (<$50M revenue).
Near-Term Outlook: We expect a short-term decline in closings, as deals set in motion early in 2025 were impacted by tariff and recession concerns. Market participants report a 25–35% drop in new deals coming to market this year.
Forward-Looking Trends: About 41% of sponsor platforms launched between 2018–2020 have yet to trade, suggesting a buildup of supply. With destocking behind us and material costs stabilizing, converters are better positioned to transact.
Acquirer Activity: All acquirer types were more active through April 2025, indicating broad attraction of packaging assets, with sponsor platforms (LBOs) showing the strongest growth compared to early 2024.
Deal Size Trends: Most transactions involved smaller companies (<$50M revenue). Larger deals remain scarce and highly competitive.
Valuation Trends: While data is limited, valuations have remained stable since 2024, staying within long-term historical ranges shared in Mazzone’s Spring 2025 Packaging Industry Insights Newsletter.
Packaging vs. Other Sectors: Inelastic and non-cyclical packaging assets are proving more resilient. As capital shifts away from cyclical sectors, demand for these assets increases.
Strategic Focus: To stay competitive, strategic buyers are prioritizing sustainable technologies, expanding and diversifying geographic reach (U.S.entities securing Canada operations and vice versa), and enhancing product portfolios.
Upcoming Packaging Industry Events
The Mazzone team is dedicated to staying engaged and informed through our active participation in key conferences and events within the packaging industry, including the upcoming events below:
AWA Mergers & Acquisitions Executive Forum June 6, Virtual
Pack Expo September 29 – October 1, Las Vegas
To explore the implications of recent Packaging industry trends, share developments within your organization, or gain insight into Mazzone’s wide range of advisory capabilities and expertise in the Packaging sector, we invite you to contact our team." Please contact Jonathan White jwhite@mazzoneib.com or Stuart Sanford ssanford@mazzoneib.com for any inquiries related to our services or information provided herein.
Note: All data reflects the periods of January to April for each of 2024 and 2025; “Converters” include Paper-based, Resin-based (rigid and flexible), Glass, Metal, and Labels (excludes Contract Packaging, Distribution, and Machinery & Equipment).
Recent Packaging Industry Transactions
Mazzone advises New Era Converting Machinery Inc. on its sale to IPCO AB, wholly owned by FAM AB
Mazzone & Associates (“Mazzone”) is pleased to announce that it acted as exclusive financial advisor to New Era Converting Machinery Inc. (“New Era” or the “Company”), with respect to the sale of New Era to IPCO AB (“IPCO”).
New Era is a web converting equipment design and manufacturing business, with two facilities located in Paterson, New Jersey. With 100+ employees and historical sales in 20+ countries, the Company is a world leading supplier of purpose-built coating, laminating, embossing, casting, calendering, and specialty systems for the web converting and roll-to-roll industry. The Company provides turnkey services, spares and systems to customers operating in a wide array of end applications including filtration, battery, packaging, adhesive and other market segments.
Mazzone & Associates (“Mazzone”) is pleased to announce that it acted as exclusive financial advisor to New Era Converting Machinery Inc. (“New Era” or the “Company”), with respect to the sale of New Era to IPCO AB (“IPCO”).
New Era is a web converting equipment design and manufacturing business, with two facilities located in Paterson, New Jersey. With 100+ employees and historical sales in 20+ countries, the Company is a world leading supplier of purpose-built coating, laminating, embossing, casting, calendering, and specialty systems for the web converting and roll-to-roll industry. The Company provides turnkey services, spares and systems to customers operating in a wide array of end applications including filtration, battery, packaging, adhesive and other market segments.
The acquisition of New Era enables IPCO to become a turnkey provider of processing equipment, with a broad portfolio of presses, film casting and web handling solutions in key industries, especially sustainability driven segments. IPCO expects to leverage its strong sales and aftermarket capabilities in 25 countries to accelerate New Era’s growth.
Paul Lembo, New Era EVP said, “Joining IPCO is the natural next step in New Era’s evolution as we secure the long-term future of our solutions, team and customers, and accelerate the growth of our business.”
Robert Hermans, IPCO CEO said, “The acquisition of New Era is a perfect strategic fit with IPCO’s business ambitions. It enhances our core offerings and introduces new dimensions to our double belt press and film casting capabilities, giving us the ability to offer turnkey solutions to our customers. This synergy will allow us to provide comprehensive and efficient web handling and calendering solutions on a global scale.”
Mazzone’s deal team was led by Jonathan White, Stuart Sanford, and Bradley Herring. Bob Pasquale, one of the founders of New Era added that “Mazzone’s guidance was instrumental in realizing a successful outcome for the selling shareholders. Their diligent and professional approach made a great result for everyone possible.”
About New Era Converting Machinery Inc.
Headquartered in Paterson, NJ, New Era is a leading supplier of purpose-built coating, laminating, embossing, casting, calendering, and specialty systems for the web converting and roll-to-roll industry. New Era also provides turnkey engineering service and spares for aftermarket services across a customer base operating in a wide array of end applications including filtration, battery, packaging, adhesive and other market segments. For more information, please visit https://neweraconverting.com/.
About FAM AB
FAM AB is a privately-owned holding company that manages its assets as an active owner with a long-term ownership horizon. FAM is owned by the three largest Wallenberg Foundations – via the holding company Wallenberg Investments AB. For more information, please https://fam.se/en.
About IPCO AB
Headquartered in Sandviken, Sweden, IPCO is an industrial process solutions company, with around 600 employees in 25 countries, which innovates, manufactures and services advanced high-performance processing equipment and steel belts, supported by a strong local sales and aftermarket presence. For more information, please visit https://ipco.com/.
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Industry Insights: Global Packaging, Spring 2025
Packaging M&A finished 2024 with robust deal flow, providing an overall strong year that surpassed the annual volumes in each of the last five years, including the prior peak year of 2021. While volumes were up, pricing (as measured as multiples of EBITDA) held constant. Early returns from the first two months of 2025 indicate a potential reversal of this volume trend; no discernable trend is yet noted in pricing.
Packaging M&A finished 2024 with robust deal flow, providing an overall strong year that surpassed the annual volumes in each of the last five years, including the prior peak year of 2021. While volumes were up, pricing (as measured as multiples of EBITDA) held constant. Early returns from the first two months of 2025 indicate a potential reversal of this volume trend; no discernable trend is yet noted in pricing.
Our key observations for this Spring 2025 edition of Industry Insights:
Transaction Volumes rebounded by 33% over 2023, eclipsing the 5-year average by a similar amount and the record year of 2021 by 6%. Each quarter was above prior year’s comparable period, with Q4-2024 volumes the highest on record at 150 transactions. Dealmakers saw through election year cycles in the US and EMEA to get transactions over the finish line in 2024.
Each Product Segment saw increased deal volume, with notable increases in Contract Packaging, Machinery & Equipment, Rigid Plastic, Rigid Other (metal, glass, wood), and Flexibles. The softest sector was Labels, which increased by only 1 transaction (2%) over 2023. The most popular product segments for M&A were Paper (98 transactions), Flexibles (68), and Distribution (62).
Buyer Composition changed significantly in 2024. In each of the last five years, Financial Sponsors (both new Platforms and Add-ons) represented over 50% of all transactions. In 2024, while Sponsors grew their volume of transactions by 12 deals, their share of Packaging Market deal flow fell to 42%. Activity among Corporate acquirers was flat on an absolute basis, falling to 19% of the mix. Volume was thus driven by Privately held businesses, which grew on an absolute basis by +107 transactions, represented 39% of the total mix.
Pricing did not reflect an overheated marketplace, with Revenue Multiples falling slightly by 0.3x versus 2023 and EBITDA Multiples holding steady at 8.0x. We believe that valuations have level set at a more sustainable average pricing of +/- 8.0x following an over-heated 2021-2022. On the whole, Financial Sponsors paid less for acquisitions versus prior years (>-1x), while Private acquirers paid +1x more.
Over the previous five years, premium valuation segments were Flexibles, Multi-format, and Machinery & Equipment and Paper-based Packaging. The only significantly discounted format was Distribution/Contract Packaging. In 2024, the various formats converged to the mean, with significant decreases in multiples among Flexibles, Paper, and Labels and noticeable price inflation in Distribution.
As we ended the year, a number of transactions hit the market with the hope of closing in 2025. We believe that many of these transactions have/will transact, but the current economic turmoil will create hesitancy on many Buyers and Sellers to initiate new processes. We anticipate a softness in volume in mid-year and look for an uptick nearer year-end, in the hope of a clearer economic and policy direction.
Recent Packaging Industry Transactions
Jonathan White to moderate panel at AWA’s Global Release Liner Summit 2025
We’re excited to share that Managing Director Jonathan White will be a panel moderator at AWA’s Global Release Liner Summit on March 20, 2025. This premier event provides a comprehensive understanding of release liner markets and applications, highlighting growth opportunities for everyone involved. Join Jonathan and other industry leaders as they explore key trends, innovations, and the future of this evolving sector.
We’re excited to share that Managing Director Jonathan White will be a panel moderator at AWA’s Global Release Liner Summit on March 20, 2025. This premier event provides a comprehensive understanding of release liner markets and applications, highlighting growth opportunities for everyone involved. Join Jonathan and other industry leaders as they explore key trends, innovations, and the future of this evolving sector.
Industry Insights: Global Packaging Industry, Fall, 2024
Through September, 2024 has delivered on the hoped-for rebound in volumes of packaging transactions and stabilization of valuations. While certainly not approaching the peak of activity and pricing seen in 2021, the market has overall been healthier than in 2023.
Through September, 2024 has delivered on the hoped-for rebound in volumes of packaging transactions and stabilization of valuations. While certainly not approaching the peak of activity and pricing seen in 2021, the market has overall been healthier than in 2023.
Our key observations for this edition of Industry Insights:
Through Q3-2024, transaction volumes rebounded by 14% over the same period of 2023, roughly in line with 2022 (-2% vs 3Qs 2022). This improvement occurred in Q1 and Q2, which produced the highest quarterly volumes since 2022.
Third quarter volumes, however, softened slightly. Anticipation of interest rate reductions in both North America and Europe likely held some financial sponsors at bay, and the pending election in the US may also be creating uncertainty which is keeping buyers in the wings. We view these as transitory issues and anticipate additional volume growth in 2025.
Segment outperformers (in volume) were the same as noted in our Winter 2024 edition - Machinery & Equipment and Rigid (non-plastic) packaging. Rigid Plastic Packaging also notched an increase in activity. Those segments with lesser activity include Flexibles and Labels.
On a run-rate basis through Q3, corporate buyers, new sponsor platforms, and sponsor add-ons were less active in 2024 versus 2023. The big change was the appetite from private buyers, which is on pace to double activity in disclosed transactions.
On the limited year-to-date sample, it appears that average deal pricing (as measured by EBITDA multiples) stabilized in 2024 after falling for 2 consecutive years, with multiples roughly equal to 2023’s level.
Over the last five years, premium valuations were observed among Flexibles, Machinery & Equipment, and Rigid Packaging (non-plastic); discounted (less than average) pricing was noted among Distribution / Contract Packaging, Paper, and Labels. This has generally held true in 2024 but with some interesting longer-term trends emerging among the segments.
As noted previously, there remain a number of transactions that have been put “on hold.” The economic and political environments are creating uncertainty which continues to weigh on pricing, and if sellers are looking for a return to 9x+ multiples, it appears that they will continue to wait well into 2025+.
Recent Packaging Industry Transactions
Director Stuart Sanford Hosts Panel at AWA Virtual Forum
Stuart Sanford, Director at Mazzone, hosted a panel discussion at AWA’s M&A Executive Forum and was joined by executives leading packaging and label companies through M&A and global expansion initiatives. Continue reading to view the recording.
Stuart Sanford, Director at Mazzone, hosted a panel discussion at AWA’s M&A Executive Forum and was joined by executives leading packaging and label companies through M&A and global expansion initiatives. Bringing perspectives of Corporate Investors, CEOs and a leading Investment Banker in Mexico, this panel explored impacts from elevated interest rates, geopolitical risks, near-shoring, ever-changing focuses on due diligence and other topics including:
Major themes impacting M&A in the packaging and label markets
Underlying data on cross-border activity and examples of corporations executing cross-continent strategies.
How the disconnect in public markets and M&A are impacting corporate development decision-making
Impacts from recent trends on due diligence processes
Lessons from expansions into new geographic markets
Impacts from recent elections in Mexico for near shoring trends
How EPR and other sustainability drivers are impacting M&A and investments
Alternatives to traditional M&A for geographic expansion
Equity and debt capital markets support for cross-border M&A and investment in Mexico and Latin America
If you were unable to attend and are interested in learning more about cross-border M&A and dynamics impacting corporate dynamic initiatives in this industry, you may view a recording of the panel below.
Panelists:
Danny Allouche: SVP & Chief Strategy & Corporate Development Officer at Avery Dennison
Virag Patel: CEO of ePac, LLC
Max Baumann: Finance Business Partner- M&A and Manufacturing at ProAmpac
Gilberto Sotelo: Managing Director at Alea Capital
Industry Insights: Global Packaging Industry, Winter 2024
Relieved that much of the world’s economy avoided recession in 2023, many in the packaging industry are nonetheless happy to have 2023 in the rearview mirror. While not necessarily a retraction, many in our industry dealt with uninspiring volume, increasing costs of labor, and increasing costs of financing. This lackluster economic backdrop and recession uncertainty, coupled with significantly increased interest rates, hit the M&A transaction market hard.
Relieved that much of the world’s economy avoided recession in 2023, many in the packaging industry are nonetheless happy to have 2023 in the rearview mirror. While not necessarily a retraction, many in our industry dealt with uninspiring volume, increasing costs of labor, and increasing costs of financing. This lackluster economic backdrop and recession uncertainty, coupled with significantly increased interest rates, hit the M&A transaction market hard.
Our key observations for this edition of Industry Insights:
Transaction Volumes continued their decline from 2021, with major segments witnessing double-digit declines. Month-to-month data provide no firm indication that volumes are yet to rebound. There were, however, pockets of positive momentum in Machinery & Equipment, Multi-material Converters, and Rigid (non-plastic) packaging.
Activity dropped across all Buyer Types (corporate, private, sponsor). The one ray of hope was an actual uptick in new sponsor-led platform formation – with new platforms slightly surpassing pre-pandemic levels.
Average deal pricing (as measured by EBITDA multiples) slid for the second year in a row, falling by more than one turn of EBITDA to 8.0x. All segments are trading at or below their five-year average pricing. This may signal an opportunity for motivated acquirers to move back into the market (see above – new platforms).
It is now clear that the aberration was not suppressed numbers in 2023, but rather over exuberance in prior years (primarily 2021). 2023’s volumes and pricing more closely resemble the Covid year of 2020. With the market anticipating central banks to cut interest rates in 2024, there’s optimism that the opportunities for acquisitions can improve, and a solidifying of demand/pricing could also translate to normalization of the M&A environment. When we will see the results of this, however, is not yet clear.
There were a number of transactions that were brought to market in 2023 but did not meet the expectations of the Sellers and remain on hold. It remains to be seen what will happen first: (i) Sellers adjust their expectations so that these deals can close, or (ii) if falling interest rates and an improved economic environment return multiples to 9.0x+. If we must wait for an improved environment, deal volumes are not likely to rebound meaningfully until 2025.
While short of 2021’s blow-out year for new Sponsor Platforms, 2023 saw a 15% increase in new platform formation by financial sponsors, bringing new platform formation in line+ to activity in 2019 - 2020. Perhaps sensing a “buy low” opportunity, sponsors executed buyouts at a 2.1x discount to multiples that they paid in 2022. While still early in the cycle, this is an indication that we may have reached a “bottom” and activity may be poised to bounce back.
Recent Packaging Industry Transactions
Mazzone advises Pamarco on the divestiture of its Palmyra operations to Precision Roll Solutions, a portfolio company of Guardian Capital Partners
Mazzone & Associates (“Mazzone”) is pleased to announce that it acted as the exclusive financial advisor to Pamarco Global Graphics, Inc. (“Pamarco” or the “Company”), a leading provider of proven technology solutions for the global packaging, industrial coatings, commercial printing, and original equipment manufacturing industries, on Pamarco’s divestiture of certain mechanical engraving and gravure print assets previously located in Palmyra, NJ to Precision Roll Solutions (“PRS”), a portfolio company of Guardian Capital Partners.
Mazzone & Associates (“Mazzone”) is pleased to announce that it acted as the exclusive financial advisor to Pamarco Global Graphics, Inc. (“Pamarco” or the “Company”), a leading provider of proven technology solutions for the global packaging, industrial coatings, commercial printing, and original equipment manufacturing industries, on Pamarco’s divestiture of certain mechanical engraving and gravure print assets previously located in Palmyra, NJ to Precision Roll Solutions (“PRS”), a portfolio company of Guardian Capital Partners.
Pamarco’s presence in Palmyra was established through its acquisition of Armotek Industries, Inc. in 1996. Since, Pamarco Palmyra has established a strong reputation as a producer of rolls used by customers in the engraving, gravure, and embossing industries, demonstrated by the Company’s long-tenured blue-chip customer relationships spanning a wide array of pharmaceutical, consumer staples, and other industrial end-market applications.
Allan Li, CEO of Pamarco, noted, “Firstly, Pamarco is proud of the operations and the brand that our employees have built in Palmyra over the past 25 plus years. Ultimately, the divestiture of the niche assets held in Palmyra will allow Pamarco to focus on its core competencies in the laser engraved anilox and engineered technology categories, which aligns with Pamarco’s long-term growth strategy. The Mazzone team proved again to be essential in working through the intricacies of a transaction that involved a complex transition period and a variety of unique nuances.”
John Burgess, Pamarco’s President, commented, “The sale of these assets to PRS is a strategic move made in conjunction with the recent acquisition of TLS in Germany to allow Pamarco to focus and strengthen its worldwide anilox business. We appreciate the Mazzone team’s dedication to executing both of these transactions in an efficient and effective manner.”
Dustin Dawson, Vice President at Mazzone, added, “We are pleased to announce another strategic transaction with the Pamarco team, particularly as this deal falls right on the heels of the October acquisition of TLS. Pamarco is rapidly positioning itself as the global leader in the laser engraved anilox technologies category, and this divestiture is one more step towards that ultimate goal.”
Managing Director Maury Bell and Vice President Dustin Dawson were lead team members on the transaction.
About Pamarco
Founded in 1946, Pamarco is a leading provider of proven technology solutions for the global printing, packaging, and converting industries. Pamarco designs, manufactures, and distributes a broad portfolio of aftermarket products that includes anilox and gravure rollers, carbon fiber chambered doctor blades, and precision equipment and accessories for print systems. Pamarco services a variety of growing markets, including global packaging, industrial coatings, commercial printing and OEMs in North America, Europe, and other global regions using its leading brand names and multiple channels to market. Pamarco’s established premium brands, including E-Flo and ThermaFlo anilox rolls, Absolute doctor blades, and Sentinel ink management systems, represent the industry standard in quality, efficiency, and precision. For more information, please visit www.pamarco.com.
About PRS
PRS is a full-service provider of highly-engineered precision roll solutions and related process componentry utilized within a variety of manufacturing environments. The Company’s components are used to coat, cut, convey, press, heat, cool, emboss, and engrave various substrates which supports the production of thousands of end-use products spanning a wide array of consumer products, life sciences, and other industrial end-market applications. For more information, please visit www.precisionrollsolutions.com.
About Guardian Capital Partners
Guardian Capital Partners is an operationally focused private equity firm based in suburban Philadelphia. Guardian makes control investments in lower middle market consumer, niche manufacturing, and specialty business services companies. Guardian partners with management teams to provide equity capital to fuel the growth of privately held businesses. Guardian believes the private equity experience and complementary skill sets of the Guardian team provide a unique combination of operating and finance capabilities resulting in certainty of execution and meaningful long-term value creation for its portfolio companies. For more information, please visit www.guardiancp.com.
Key Takeaways from Pack Expo 2023
Managing Director Jonathan White shares his key takeaways from Pack Expo Las Vegas, where the mood was slightly subdued due to flattish volumes reported by companies across the Packaging Industry. Lower volume was somewhat mitigated by improved margins resulting from decreases in cost inputs, which have yet to be passed along to customers. However, customers will eventually be clawing back these cost decreases, and Mazzone is keeping a close eye on the timing of these claw backs versus the rebound in volumes to determine the best time for our clients to enter the marketplace.
Managing Director Jonathan White shares his key takeaways from Pack Expo Las Vegas, where the mood was slightly subdued due to flattish volumes reported by companies across the Packaging Industry. Lower volume was somewhat mitigated by improved margins resulting from decreases in cost inputs, which have yet to be passed along to customers. However, customers will eventually be clawing back these cost decreases, and Mazzone is keeping a close eye on the timing of these claw backs versus the rebound in volumes to determine the best time for our clients to enter the marketplace.
In our latest edition of Industry Insights: Global Packaging, we noted that Packaging Industry transaction volume and pricing have been down, and this was reflected anecdotally by companies we spoke with at Pack Expo that have transactions lingering in the marketplace due to the bid-ask gap between buyers and the sellers. Mazzone believes buyers are being conservative on valuations due to aforementioned low volumes and a concern over margins—with cost input decreases impacting margins in the present, is the data sufficiently transparent for the buyer to understand the sustainable margin of the business going forward? We saw indications of rebounding activity late this summer but don’t anticipate a sustained shift until Q1 of 2024 when mounting pressures to complete transactions force dealmakers to find a way to get the deal done.
Industry Insights: Global Packaging Industry, Summer 2023
As the Industry heads to Pack Expo in September, Mazzone & Associates provides our semi-annual update on Mergers & Acquisitions activity in the Packaging Industry.
As the Industry heads to Pack Expo in September, Mazzone & Associates provides our semi-annual update on Mergers & Acquisitions activity in the Packaging Industry. Key observations for this edition of Industry Insights:
Transaction Volumes are down from 2022: -7% for the trailing four quarters (June 2023) and -13% for the annualized run rate. There are signs, however, that volumes will bounce back in the second half of this year (p. 2).
EBITDA Multiples are down year-over-year, normalizing to the mean of the last five years. While EBITDA Multiples are down, Revenue Multiples are up, signaling shifts in profitability of transacted companies (p. 4).
Financial Sponsors, both as strategic add-on acquirers and new platform buyers, remain very active, whereas Private and Corporate Buyers are being less aggressive (p. 5).
Overall Cross-Regional M&A is consistent with prior years, but shifts in Target Geographies favor EMEA and ROW (Rest of World) versus North America (p. 6).
Public Company valuations have not shifted significantly over the last year and remain at the lower end of their trading range for the past decade (pp. 6-7).
Recent Packaging Industry Transactions
Mazzone advises TSC Auto ID Technology with respect to the acquisition of a producer of labels and shrink sleeves located in Poland
Mazzone & Associates (“Mazzone”) is pleased to announce that it acted as exclusive financial advisor to TSC Auto ID Technology Company (“TSC”) with respect to its acquisition of a producer of labels and shrink sleeves located in Poland (“the Company”).
The Company is a privately held producer of TTR Tapes, unprinted labels, flexographic printed labels, and shrink sleeves for the Polish and European market. The Company also offers label printers, code scanners, mobile terminals, and RFID technology for its customers. Operations are conducted in two facilities strategically located in Poland.
June 2023 Mazzone & Associates (“Mazzone”) is pleased to announce that it acted as exclusive financial advisor to TSC Auto ID Technology Company (“TSC”) with respect to its acquisition of a producer of labels and shrink sleeves located in Poland (“the Company”).
The Company is a privately held producer of TTR Tapes, unprinted labels, flexographic printed labels, and shrink sleeves for the Polish and European market. The Company also offers label printers, code scanners, mobile terminals, and RFID technology for its customers. Operations are conducted in two facilities strategically located in Poland.
John Otott, Global General Manager of Consumables for TSC, noted that “the combination of our two organizations will allow TSC to better serve our European customer base with genuine OEM supplies in addition to our extensive portfolio of hardware to deliver complete, reliable, and high-quality label printing. We selected Mazzone to assist us in this transaction, as their understanding of both the market and how to get deals done in a challenging environment was key to our success. Furthermore, their ability to break down complex deal dynamics into simple solutions allowed us to reach a successful transaction.”
Jonathan White, Managing Director at Mazzone, noted, “We are pleased to have the opportunity to partner with TSC and guide them through this cross-border acquisition. This combination will undoubtedly move TSC’s strategy forward and also create opportunities for the Company. TSC will be a great partner for the Company and its employees, and we are eager to see what they will accomplish together.”
Jonathan White, Managing Director; Stuart Sanford, Director; and Ryan Durham, Associate were lead team members on this transaction.
About TSC
Serving customers in over 100 countries, TSC Auto ID Technology Company (Taiwan Stock Exchange: 3611) is a leading designer and manufacturer of innovative asset tracking and identification solutions, including mobile, desktop, industrial and enterprise-grade barcode label printers, RFID printers, barcode label inspection systems, print engines, and genuine supplies. With one of the industry’s most comprehensive selection of barcode label printers, TSC provides solutions for transportation and logistics, retail, manufacturing, food and beverage, healthcare, and automotive companies seeking world-class, innovative, and high-performance tracking and identification solutions. With over 6 million printers sold around the world, TSC is committed to providing strong local sales engineering support, continuous investment in new product development, and quick solutions to meet the needs of small and medium-sized businesses and Fortune 500 companies around the world. For more information, please visit www.tscprinters.com.
Mazzone Industry Insights: Labels
Acquisitions in the Label Market have been on a tear for the last five to ten years, with Mazzone’s tracked transaction volumes increasing from 30 in each of 2018 and 2019 to a peak of 70 transactions in 2021. 2022 activity retreated -7%, roughly in line with Packaging Overall (-9%) and relatively resilient as compared to transactions across the broader economy (-20%).
Acquisitions in the Label Market have been on a tear for the last five to ten years, with Mazzone’s tracked transaction volumes increasing from 30 in each of 2018 and 2019 to a peak of 70 transactions in 2021. 2022 activity retreated -7%, roughly in line with Packaging Overall (-9%) and relatively resilient as compared to transactions across the broader economy (-20%).
The cooling off reflects increases in inflation and interest rates as well as fears of recession (please refer to Mazzone’s Winter 2023 Global Packaging Insights). This is particularly evident in the quarterly data: in the six quarters beginning Q1-21, the average transaction count was 18.5; each of the last three quarters ending March 2023 had “only” 12 transactions (-35%).
2023 AWA Global Release Liner Industry Conference and Exhibition: Key Takeaways
In the following video, Managing Director Jonathan White discusses key insights from this year’s AWA Global Release Liner Industry Conference in Denver, CO, which he attended with Director Stuart Sanford.
In the video below, Managing Director Jonathan White discusses key insights from this year’s AWA Global Release Liner Industry Conference in Denver, CO, which he attended with Director Stuart Sanford. If you’re interested in learning more, click here for AWA’s report on the proceedings.
You can also find us June 6th moderating a panel at AWAVirtual™ M&A Forum Executive Forum 2023 where we will discuss the latest drivers on deal flow in packaging and labeling sector. Register at https://awa-bv.com/product/awa-mergers-acquisitions-executive-forum-2023/
We hope to see you there!
Industry Insights: Global Packaging Industry, Winter 2023
2022 ended on a whimper, bringing 2022's M&A transaction volume down by over 20% across all industries as increases in inflation and interest rates as well as fears of recession dampened appetites for acquisitions worldwide. Similarly, Valuations (measured as a multiple of EBITDA) declined by at least 1.9x from 2021’s high point. Mazzone’s universe of Packaging Transactions, however, points to a more resilient marketplace. Overall, our tracked global deal volume declined 9% over 2021 and median EBITDA valuations declined by 0.7x. While not good news, 2022’s Packaging Sellers can take solace that they fared better than the overall market.
2022 M&A Environment
2022 ended on a whimper, bringing 2022’s M&A transaction volume down by over 20% across all industries as increases in inflation and interest rates as well as fears of recession dampened appetites for acquisitions worldwide. Similarly, Valuations (measured as a multiple of EBITDA) declined by at least 1.9x from 2021’s high point. Mazzone’s universe of Packaging Transactions, however, points to a more resilient marketplace. Overall, our tracked global deal volume declined 9% over 2021 and median EBITDA valuations declined by 0.7x. While not good news, 2022’s Packaging Sellers can take solace that they fared better than the overall market.
Recent Packaging Industry Transactions
Mazzone advised INDEVCO North America on its acquisition of Perma R Products, Inc.
Mazzone & Associates is pleased to announce that it acted as the exclusive financial advisor to INDEVCO North American on its acquisition of Perma R Products, Inc.
Mazzone & Associates (“Mazzone”) is pleased to announce that it acted as the exclusive financial advisor to INDEVCO North America (“INDEVCO”) in its acquisition of Perma R Products Inc. (“Perma R” or “the Company”), a leading U.S. building envelope materials manufacturer.
“The acquisition of Perma R,” says Bahjat Frem, Executive Chairman of INDEVCO North America, “is another steppingstone in our commitment to grow into a leading industrial company in the US. Mazzone has been an instrumental partner in molding and executing our acquisition strategy for our business units in North America. Their M&A expertise was critical in guiding our team through each stage of this transaction process and ensuring this exciting partnership resulted in a successful transaction. We are eager to continue investing in organic growth and acquisition initiatives in support of INDEVCO’s long-term goals in the U.S.”
With over 40 years in business, Perma R Products produces EPS and GPS non-structural rigid foam insulation for interior, exterior, and subterranean applications, as well as building wrap and roof underlayment. From their locations in Mississippi, Georgia, and Tennessee, the company supplies home improvement retail, building material distributors, lumber dealers, national builders, and contractors across the country.
Jonathan White, Managing Director at Mazzone, added “this acquisition underlines INDEVCO’s growing commitment to the U.S. market. The combined capabilities and expertise of INDEVCO and Perma R will allow them to offer one of the most comprehensive, energy-efficient building envelope portfolios in North America. Perma R has built a great business and we are eager to see what lies ahead for both teams and their customers.”
The Perma “R”® brand will be sold parallel to INDEVCO’s Barricade® brand of building envelope products, produced in Doswell, Virginia. Both brands will serve different channels, end markets, and geographical territories. Tim LeClair will continue to lead the company’s operations as Vice President of Perma R. “It’s a win-win for our customers across the country,” LeClair states. “The Perma R – INDEVCO synergies are remarkable and joining as strategic partners will make it easy for customers to do business with us.”
Ned Bassil, CEO of INDEVCO North America, explains, “We’re very excited about joining forces with a well-respected company with strong values and a high level of customer service. The acquisition of Perma R enhances our building envelope product portfolio into a comprehensive offering with a deeper and broader selection for our existing customer base, while giving us access to new customer segments.”
Read the INDEVCO North America Press Release here.
About Perma R Products, Inc.
Perma R Products, a family-owned company launched in 1979, produces rigid EPS and GPS foam insulation for above grade and below grade applications, building wrap, and roof underlayment. The company operates manufacturing facilities in Grenada, MS; Adel, GA; and Johnson City, TN.
www.PermaRProducts.com
About INDEVCO North America
INDEVCO has operated for over 40 years in the US market, as Interstate Resources, Inc. through 2017 and presently as INDEVCO North America. A protective materials manufacturing group, INDEVCO North America innovates Building Products and Packaging Solutions in Doswell, VA; Orangeburg, SC; and Longview, TX. In addition, the group manages recycling operations for reprocessed and biomass materials that create a circular economy. Member manufacturing plants serve a growing list of industries, including building and construction, beverage, chemical and petrochemical, food, industrial salt and minerals, lawn and garden, packaging converting, pet food, and transport.
www.INDEVCONorthAmerica.com
Industry Insights: Global Packaging Industry, Fall 2022
After a banner year for acquisitions in 2021, everyone anticipated a decrease in deal activity. Indeed, broader measures for 2022 suggest deal activity will be down as much as 20%versus 2021. Anecdotally, greater availability among providers of QOEs and Rep & Warranty Insurance indicates capacity in these support industries, which further supports a sense of a softer market.
Transaction Activity Resilient in the Face of Challenges
After a banner year for acquisitions in 2021, everyone anticipated a decrease in deal activity. Indeed, broader measures for 2022 suggest deal activity will be down as much as 20%versus 2021. Anecdotally, greater availability among providers of QOEs and Rep & Warranty Insurance indicates capacity in these support industries, which further supports a sense of a softer market.
Year-to-date through July, however, our universe of packaging transactions was up 3% from where we were in July 2021. Early returns from July and August suggest that this trend continued through the summer. As volumes in Q4-2021 were unusually strong, we anticipate overall annual volumes to remain essentially flat with 2021 by year end.
How is this possible, given the headwinds of increasing inflation and interest rates, geopolitical unrest, and continued labor and supply chain issues?
Recent Packaging Industry Transactions
Mazzone & Associates advised Mativ (NYSE: MATV) on the sale of the Filtrexx, Inc. product division to MKB Company, a portfolio company of Kurtz Bros., Inc.
Mazzone & Associates (“Mazzone”) is pleased to announce that it acted as exclusive financial advisor to Mativ Holdings, Inc. (NYSE: MATV), (“Mativ”) on its sale of the product arm of Filtrexx, Inc. (“Filtrexx”) to MKB Company, a portfolio company of Kurtz Bros., Inc.
Mazzone & Associates (“Mazzone”) is pleased to announce that it acted as exclusive financial advisor to Mativ Holdings, Inc. (NYSE: MATV), (“Mativ”) on its sale of the product arm of Filtrexx, Inc. (“Filtrexx”) to MKB Company, a portfolio company of Kurtz Bros., Inc.
Filtrexx, headquartered in Akron, OH, is a manufacturer and installer of sustainable sediment and erosion control products. The company, founded in 2001, was formerly a subsidiary of Conwed Plastics, which was acquired by Mativ in 2017.
MKB, a leading provider of environmental control products and services is backed by Kurtz Bros., Inc. For years, MKB and Filtrexx have worked separately to create products and services, as well as educate the industry on the most effective and durable stormwater BMPs in the market. The unification of the two organizations will combine both company’s product lines to bring the best erosion and stormwater control product offerings to the industry nationwide. Expanded resources, readily available products, extended reach, expanded manufacturing locations, and combined service are just a few benefits MKB and Filtrexx will bring to the market.
“The combination of these two organizations and their product lines will bring the best erosion and stormwater control product offering to the industry nationwide. We are excited by the possibilities!” says Rick Costello, Vice President of Strategy at MKB Company.
Jonathan White, Managing Director at Mazzone, highlighted, “We are pleased to have the opportunity to work directly with the Filtrexx and Mativ management teams and guide them through the carveout of the Filtrexx division. We are excited to see MKB and Filtrexx come together in providing best-in-class infrastructure solutions to the U.S. market and beyond.”
Stuart Sanford, Director at Mazzone, and Ryan Durham, Associate at Mazzone, were lead team members on this transaction.
Terms of the transaction were not disclosed.
About Filtrexx
Filtrexx International is a global leader in Sustainable Best Management Practice (BMP) solutions for use in erosion and sediment control, stormwater management, pollutant removal, and low-impact development to protect soil, water, and environment. Filtrexx has an extensive network of partners and distributors to serve customers across the globe. www.filtrexx.com
About MKB Company
A holding company of Kurtz Brothers, MKB Company is a leading provider of products and services in the environmental control market. Their products are used in perimeter control, sediment management, erosion control, and pollution control markets. As an industry leader committed to excellence in customer satisfaction, they continue to manufacture innovative products and solutions that allow contractors and distributors to serve customers looking for better environmental outcomes. www.mkbcompany.com
About Mativ
Mativ Holdings, Inc. is a global leader in specialty materials headquartered in Alpharetta, Georgia. The company offers a wide range of critical components and engineered solutions to solve our customers’ most complex challenges. With over 7,500 employees worldwide, we manufacture on four continents and generate sales in more than 100 countries. The company’s two operating segments, Advanced Technical Materials and Fiber-Based Solutions, target premium applications across diversified and growing end-markets, from filtration to healthcare to sustainable packaging. Our broad portfolio of technologies combines polymers, fibers, and resins to optimize the performance of our customers’ products across multiple stages of the value chain. Our leading positions are a testament to our best-in-class global manufacturing, supply chain, and materials science capabilities. We drive innovation and enhance performance, finding potential in the impossible. www.mativ.com
Managing Director Jonathan White Featured at AIMCAL Executive Leadership Conference
On April 5th, Mazzone presented at the Executive Leadership Conference for AIMCAL (Association of International Metallizers, Coaters, and Laminators).
On April 5th, Mazzone presented at the Executive Leadership Conference for AIMCAL (Association of International Metallizers, Coaters, and Laminators). We discussed our view on the M&A market for Web Converting, focusing on how to position to take advantage of this very active market. It was great to meet senior leaders of the industry at this event, and we trust that everyone at the event in Charlotte found the information useful. Thanks to the team at AIMCAL for putting on a great event! If you’d like view the presentation, please reach out to Jonathan White at jwhite@mazzoneib.com.
Industry Insights: Global Packaging Industry, Winter 2022
2021 was remarkable for the economy, the transaction market overall, and specifically for the Packaging Transaction Market. Packaging companies benefitted from robust demand which grew pipelines and revenue forecasts, with many companies producing record results. There were challenges, however, as many struggled to keep up with material price increases, unavailability of key components, delays in expansion plans and labor shortages.
2021 was remarkable for the economy, the transaction market overall, and specifically for the Packaging Transaction Market. Packaging companies benefitted from robust demand which grew pipelines and revenue forecasts, with many companies producing record results. There were challenges, however, as many struggled to keep up with material price increases, unavailability of key components, delays in expansion plans and labor shortages. The transaction market looked beyond these issues, however, with our recorded deal volume up 45% in 2021 to a total of 444 deals. To be sure, some of this is a reporting bias as every year brings better data collection. Nevertheless, all market participants agreed that 2021 was an unusually elevated level of activity.
