SIG to acquire Scholle IPN to broaden leadership in sustainable packaging systems and solutions

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SIG to acquire Scholle IPN to broaden leadership in sustainable packaging systems and solutions
  • Scholle IPN is a leading innovator of sustainable packaging systems and solutions for liquids

  • Global number one in bag-in-box, number two in spouted pouches with revenue of €474 million

  • Enterprise value of €1.36 billion to be funded through a mix of shares, cash, and debt refinancing

  • Complementary product offering with significant scope for geographic and category expansion

  • Shared focus on innovation and sustainability

  • Growth outlook consistent with SIG’s mid-term guidance of 4 – 6% p.a.; maintaining best-in-class margins and strong cash generation

  • Accretive to cash flow and adjusted earnings per share from first year after completion

  • SIG preliminary 2021 results confirm strength of aseptic carton business with core revenue growth of 6.6% and an increase in adjusted EBITDA margin to 27.7%

SIG preliminary 2021 results (unaudited)

In the context of the acquisition announcement, SIG today announced strong preliminary results for the full year 2021. Core revenue was €2,047 million, representing a like-for-like increase of 6.6%1 at constant currency, exceeding the guided range of 4 – 6%.  Adjusted EBITDA increased to €571 million with an adjusted EBITDA margin of 27.7%, compared with 27.4% in 2020.  Free cash flow was €258 million compared with €233 million in 2020.  At the AGM the Board of Directors will propose an increase in the dividend to CHF 0.45 per share (2020: CHF 0.42 per share) to be paid out of the capital contribution reserve.

1 Like-for-like including MEA, at constant currency

Acquisition of Scholle IPN

SIG has entered into an agreement to acquire 100% of Scholle IPN, a privately held company, for an enterprise value of €1.362 billion and an equity value of €1.05 billion. The transaction will be funded through 33.75 million SIG shares issued from existing authorised capital and €370 million cash; the existing debt of Scholle IPN will be refinanced at closing. The transaction is expected to close before the end of the third quarter of 2022 subject to customary closing conditions.

2 At current US$/€ exchange rate

This acquisition diversifies SIG’s exposure to growing and resilient end-markets. SIG’s portfolio of market-leading sustainable food and beverage carton solutions will be expanded into bag-in-box and spouted pouches for retail, institutional and industrial customers. SIG and Scholle IPN have many similarities and are highly complementary businesses in terms of systems and product offering.  The combination will unlock significant growth opportunities and value.

Founded in 1945, Scholle IPN is a leading innovator in sustainable packaging with a systems offer­ing. It is the inventor of and global leader in bag-in-box (2l –1,500l capacity) and the number two in spouted pouches (50ml – 500ml capacity). The acquisition will therefore expand SIG’s portfolio into both larger and smaller formats.  Scholle IPN is headquartered in the USA and has approxi­mately 2,100 employees globally. Revenue in the twelve months to 31 December 2021 was €474 million with adjusted EBITDA of €90 million (adjusted EBITDA margin c.19%)3.  The USA accounts for around 55% of revenue and the acquisition will significantly increase SIG’s presence in this large and attractive market. It will also enable the expansion of the Scholle IPN portfolio into the emerging markets of Asia Pacific, Latin America and Middle East Africa, where SIG has a well-estab­lished presence.

3 Unaudited. At 2021 average US$/€ exchange rate

With this acquisition, SIG will be able to offer the most sustainable packaging solutions across a wide range of categories and product sizes. Growth in bag-in-box is being driven by the shift from rigid to flexible packaging which significantly reduces the amount of material needed to package the product.  Scholle IPN has a longstanding focus on sustainability and on the light-weighting of both packaging and fitments. It is a pioneer in the development of mono-materials which are designed for recycling.  Joining together the R&D capabilities of the two companies will deliver more value to customers by advancing the development of material and aseptic technology to reduce carbon emissions and food waste.

Around 70% of Scholle IPN revenues are in food and beverages which will underpin the resilience already demonstrated by SIG’s business. The acquisition will enable SIG to build on its core strength in aseptic technology and to expand its use in both pouches and bag-in-box.  It will also drive SIG’s expansion into new categories such as wine and water. Like SIG, Scholle IPN has devel­oped long-standing customer relationships and the acquisition brings multiple cross-selling oppor­tunities, as well as potential for an enhanced service offering for the combined customer base. In addition, run-rate cost synergies of €17 million will be generated in areas such as pro­cure­ment and manufacturing efficiencies.

Samuel Sigrist, CEO of SIG, said: “The acquisition of Scholle IPN cements SIG’s position as a global leader in innovative and sustainable packaging for food and beverages.  It is consistent with our strategy of geographic and category expansion accompanied by share gains in key markets.  By delivering clear benefits for customers, consumers, and the environment, we will drive value for shareholders.”

Laurens Last, Chairman and owner of Scholle IPN, said: “This combination is compelling for our customers, who will benefit from our capabilities and expertise in the liquid packaging industry. I am excited about the future of the combined business, and I look forward to our joint innovation, with SIG further developing packaging substrates and solutions that are at the forefront of sustain­ability.”

Transaction details

The acquisition values Scholle IPN at an enterprise value of €1.36 billion, equivalent to a multiple of 14.5x adjusted EBITDA for the twelve months ending 31 December 2021, or 12.2x adjusted for the annual run-rate synergies of €17 million. An earn-out may be payable in three annual instal­ments of up to €89 million p.a. for the years ending 31 December 2023, 2024, and 2025, contingent upon Scholle IPN outperforming the top end of SIG’s mid-term growth guidance of 4 – 6% p.a. in the respective years.  Earn-out payments for growth rates ranging from 6 – 11.5% p.a. are subject to a pre-agreed ratchet structure.

The consideration for the equity value of €1.05 billion comprises 33.75 million SIG shares from existing authorised capital and €370 million cash, subject to customary closing adjustments.  The existing debt of Scholle IPN will be refinanced at closing. Any potential future earn-out payment would be payable in cash. As a result of the share consideration, the current owner of Scholle IPN Laurens Last will become the largest single shareholder in SIG, with a pro-forma shareholding of 9.1% subject to a lock-up period of 18 to 24 months4. Mr. Last will be nominated for election to the Board of Directors of SIG at the forthcoming AGM on 7 April 2022.  Ross Bushnell, CEO of Scholle IPN, will join SIG’s Group Executive Board.

4 100% for 18 months and 75% for 24 months

The transaction is expected to be accretive to cash flow and adjusted earnings per share from the first full year after completion, adding to the strong and resilient financial profile of SIG, with above market growth, best-in-class margins, superior cash conversion and attractive dividends.

The financing of the transaction is secured via an acquisition bridge facility with a maturity of 18 months which is expected to be partially refinanced through an equity issuance of approximately €200-250 million, implying pro-forma (31 December 2021) leverage of around 3.25x (net debt/EBITDA).

Mid-term guidance

Following the acquisition SIG will maintain mid-term revenue growth guidance of 4 – 6% p.a. at constant exchange rates.  The combined business (including Evergreen Asia) has scope for margin expansion and the adjusted EBITDA margin is expected to rise above 27% in the mid-term.  Net capital expenditure as a percentage of revenue is expected to be 7 – 9%.  The company will main­tain its progressive dividend policy with a payout ratio of 50 – 60% of adjusted net income.  The commitment to a net leverage ratio of towards 2x is also maintained, with an expectation of net leverage around 2.5x by the end of 2024.


UBS Investment Bank acted as exclusive financial adviser to SIG; Latham & Watkins and Advestra acted as legal advisers to SIG.


The company will host a webcast for analysts and investors at 10:00 CET on Tuesday 1 February. You can register for the webcast here. The webcast will be followed by a Q&A session. The slide presentation will be available from 9:30 CET on 1 February at:

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