SUN EUROPEAN Partners has snapped up two packaging companies including Lincolnshire-based Paragon Print & Packaging in a £400m spending spree.
Sun European, an arm of US private equity firm Sun Capital, yesterday said it had bought a 49 per cent stake in Paragon from Equistone and LDC for an undisclosed sum.
Sun European also completed its purchase of London-listed Rexam’s cosmetics division yesterday.
Paragon makes packaging and food labels for the likes of Sainsbury’s, Boots and Tesco. Its revenues totalled £170m last year.
The sale marks the end of more than a decade of investment from Equistone, which was until 2011 part of Barclays.
Equistone used Rothschild as its financial advisers on the deal, with a team led by Andrew Thomas and Alistair Allen, while Pinsent Masons provided legal advice.
PwC and Boston Consulting Group were also drafted in to advise.
For Sun European, KPMG advised on accounting and tax and DLA Piper worked on the legal aspects.
Equistone has exited several investments in the packaging sector in the last year, amid a period of consolidation in the industry.
“There’s been a move towards higher-quality consumer packaging especially given the rise of discount retailers such as Aldi and Lidl who use consumer-ready packaging not just for transporting goods but for shelving and marketing,” said Davy Stockbrokers analyst Barry Dixon said of the sector.
FTSE 100 component Rexam put its underperforming personal care division up for sale last February in two parts, and Sun European fought off rival private equity bidders to take the cosmetics arm in an acquisition thought to be worth close to £300m in July.
The purchase, which was conducted through Sun European affiliate Albea, has now been given the required regulatory approvals.