It’s the world’s largest manufacturer of carton packaging for the food and beverage industry. Toronto private equity firm, Onex Corporation, the largest buyout firm in Canada, has agreed to buy SIG Combibloc from Rank Group New Zealand. SIG was acquired by the Rank Group in 2007 and had been part of Rank’s Reynolds Group Holdings division of packaging businesses.
Under the terms of the deal, Onex will pay Reynolds €3.575 billion (AU$5.4bn) at closing and an additional amount of up to €175 million (AU$25208m) based on SIG’s performance in 2015 and 2016. Privately held company, Rank, paid €1.7 billion (AU$2.46bn) for SIG in 2007. The transaction is subject to regulatory approval and is expected to close in the first quarter of 2015.
“SIG’s management team has successfully proven its ability to enter and grow in new markets, while maintaining its standard of excellence in existing markets,” stated Nigel Wright, a managing director in Onex’s London office.
SIG is short for Schweizerische Industrie Gesellschaft, and the company, founded in 1853, has also manufactured railway cars and firearms for the Swiss military in its past. SIG merged its railroad division into a joint venture with Fiat in the 1990s, which was eventually sold to Alstom in 2000. The weapons manufacturing business was sold the same year so that the company could focus exclusively on its packaging business, which had been part of SIG since 1906.
SIG, with its base in base in Neuhausen am Rheinfall, Switzerland, manufactures packaging for food and beverages, as well as packaging machinery. The company posted revenue of €1.68 billion AU$2.43bn) in 2013 and has about 5,200 employees in more than 40 countries. It makes cartons for leading brands like V8 vegetable drinks and Campbell soups.
Onex was founded in 1984 and has about $20 billion (AU$23.2bn) in assets under management. Its business assets are worth about $29 billion (AU$33.7bn). Its portfolio of investments includes a wide range of industries, such as aircraft leasing, building products, health care imaging and financial services. The private equity firm and its investing partners own 82% of the Tropicana casino and hotel in Las Vegas. Onex has been making a strategic push into Europe, most recently opening a credit office in October to begin offering collateralised loan obligations on the continent. It has made only one significant acquisition so far in 2014 with the July purchase of York Risk Services Group, a provider of risk management, insurance claims and managed-car services, for $1.33 billion (AU$1.54bn).
