In order to own an enhanced consumer packaging portfolio, Mondi Group – the South African packaging giant, announced the acquisition of Excelsior Technologies – the UK-based innovative flexible packaging firm. It was declared on February 6 that Mondi has bought 100% of the outstanding share capital of Excelsior from the funds managed majorly by Endless LLP, a private equity firm, and a few other minority shareholders. The deal is reportedly evaluated to be worth £33 million (US$ 41 Mn), on a debt-free and cash-free basis.
Mondi Group, with established operations in over 30 countries across the globe, produces and sells consumer packaging and paper products. In 2016, Mondi successfully acquired Russia and Turkey-based packaging businesses. The group’s major operations are located in central Europe, North America, South Africa, and Russia.
Excelsior Technologies, being a specialized provider of innovative flexible packaging solutions, has registered the revenues totaling £39 million (€47 million) by 2016 end. The company’s expertise in food packaging applications extends to a unique, patented packaging technology especially designed for microwave steam cooking. Moreover, the product portfolio also involves lidding films, roll stock, and pouches. Flexibles has been one of the most desirable sectors in packaging with the highest growth potential since the past few years.
While several packaging companies are striving to enter the flexible packaging segment, Mondi has captured the right time to jump into the flexibles.
“This acquisition will support the development of Mondi’s consumer packaging business in high growth product applications. Excelsior’s leading microwave steam cooking packaging technology perfectly complements and enhances Mondi’s global food packaging offering,” David Hathorn, CEO, Mondi Group, commented on the acquisition.
Packaging News quoted Nicholas Mockett, the Head, Packaging M&A, Moorgate Capital saying, “Performance improvement at Excelsior’s end has been extremely impressive and the most of its credit must go to Keith Chapman, the Executive Chairman, Excelsior Technologies. This deal will enable both the entities to beat other long run packaging specialists. Mondi is a natural home for Excelsior and will complement Mondi’s portfolio of assets around Europe.”
Chapman is equally excited to see Excelsior become a part of Mondi Group. “Glad to find a partner that is a perfect fit with Excelsior’s current business strengths, from a product, sales, and manufacturing organization’s perspective. Excelsior already has a strong, established customer base, which would now be enjoying additional benefits that would be brought in through Mondi’s expertise and investment,” he says.
Foraying into the fresh & prepared food packaging sector
As the global food and beverages sector increasingly demands more flexible, innovative, functional packaging solutions, Mondi Group strives to meet soaring need for consumer convenience regarding on-the-go and pre-prepared meals, and extended shelf-life of prepared as well as fresh foods. Buying Excelsior is Mondi’s top strategic move in order to achieve the long-term goal, enhancing its brand reputation.
After announcement of the deal, Peter J. Oswald, CEO, Mondi (Europe & International) claimed, “Mondi, through this deal, intends to delight customers with innovative and sustainable packaging solutions and this acquisition will enable the company to offer a broader and complementary range of consumer packaging products, especially targeting food applications.”
Mondi Group also confirmed that post-acquisition, David Hathorn will retire in February, 2018. However, he will soon be replaced by the new CEO of the group, Oswald. According to sources, Hathorn will continue to work in Mondi’s executive capacity, till he retires.