04.12.21
Crown Holdings, Inc. announced that it has entered into a definitive agreement to sell its European Tinplate business to KPS Capital Partners, LP. Crown will receive pre-tax proceeds of approximately €1.9 billion from the transaction and will retain a 20% ownership stake in the business.
The European Tinplate business comprises 44 manufacturing facilities in 17 countries in Europe, the Middle East and Africa which produce food cans and ends, aerosol cans, metal closures and promotional packaging for various consumer brands. In 2020, the business generated €1.9 billion in revenue and approximately €220 million in estimated standalone EBITDA and had approximately 6,300 employees.
"European customers and consumers alike have long embraced metal packaging, valuing the premium product protection and flavor preservation that it offers," said Timothy J. Donahue, president and CEO . "The infinitely recyclable food can is unrivaled from a sustainability standpoint, helping eliminate over one billion liters a year in food waste. We are excited to retain a minority stake in the business alongside KPS as Crown shareholders will benefit from the KPS team and its track record of owning manufacturing companies and creating tremendous value."
"The size and scale of the business, the breadth of its products and its critical food safety technology and process disciplines developed over decades, coupled with growing end-markets, are the foundation of a tremendous investment platform," added Michael Psaros, co-founder and co-managing partner of KPS.
Crown expects to use the net proceeds, after closing working capital adjustments, taxes and other transaction-related costs, to further reduce debt, fund capital projects and repurchase shares over time under its recent $1.5 billion authorization dated Feb. 25, 2021.
For illustrative purposes only, and assuming all net proceeds of the transaction were used to reduce debt, the company's estimated pro forma adjusted net leverage ratio at the end of 2021 (excluding all 2021 EBITDA related to the European Tinplate business) would be 2.9x compared to the 3.9x at Dec. 31, 2020.
The sale of the European Tinplate business is expected to close during the third quarter of 2021 and is subject to certain regulatory approvals and customary closing conditions.