Silgan Holdings Inc. (Nasdaq: SLGN), a leading supplier of rigid packaging for shelf-stable food and other consumer goods products, announced today that it has entered into a definitive agreement to purchase Portola Packaging, Inc., a leading manufacturer of plastic closures. This business, with sales of approximately $200 million in 2012, operates eight facilities in North America and Europe.
“We believe that the acquisition of Portola broadens our global closure franchise,” said Bob Lewis, Executive Vice President and Chief Financial Officer. “Portola has a strong reputation as an innovator in closure design and operational leadership. As a result, we believe this acquisition will be highly synergistic with our existing closure business, while providing a broader platform to service our customers’ market needs. In addition, we are excited about the opportunity to expand our relatively small European plastic closure presence through Portola’s manufacturing facilities in the United Kingdom and Czech Republic,” concluded Mr. Lewis.
The purchase price for this transaction is $266 million, and the acquisition is expected to be slightly accretive to earnings initially, excluding the impact of the required purchase accounting write-up of inventory, becoming more accretive as synergies are phased in over the next eighteen months following the closing. The transaction is expected to close as early as September 2013, subject to certain customary conditions and regulatory approvals, and Silgan expects to fund the purchase price for this acquisition from a combination of cash on hand and borrowings under the Company’s senior secured credit facility.
