Crown Holdings offloads EMEA food packaging unit to private equity firm KPS in US$2.68bn deal

EMEA –  American-based packaging manufacturer Crown Holdings has agreed to sell its Europe, Middle East and Africa (EMEA) food packaging unit to private equity firm KPS Capital Partners, in a deal valued at €2.25 billion (about US$2.68 billion).

Crown’s European Tinplate business produces food cans and ends, aerosol cans, metal closures, and promotional packaging for various consumer brands.

The business is regarded as one of the largest manufacturers of steel and aluminium food packaging in Europe, operating 44 manufacturing facilities in 17 countries across Europe, the Middle East and Africa.

According to a statement from Crown, the unit now being sold to KPS, generated €1.9 billion (about US$2.26 billion)  in revenue in 2020.

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Crown will receive pre-tax proceeds of approximately €1.9 billion from the sale and will retain a 20% ownership stake in the business, which will now operate as an independent company.

According to a statement from Crown, net proceeds from the sale will be used for debt reduction, beverage can capital projects and share repurchases over time.

New Kentucky facility

Earlier, on March 2, Crown Holdings announced that it will build a new beverage can manufacturing facility in Kentucky to support increased demand for beverage cans in North America.

The facility will supply beverage cans to companies serving a variety of categories including sparkling water, energy drinks, carbonated soft drinks, teas, nutritional beverages, hard seltzers, craft beers and cocktails.

The transaction of the EMEA business is expected to close in the third quarter of 2021, and is subject to customary closing conditions and regulatory approvals.

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Timothy Donahue, president and CEO, said: “We are very pleased that the European Tinplate business will have a strong owner in KPS Capital Partners to support future profitable growth and innovation initiatives.

We are excited to retain a minority stake in the business alongside KPS as Crown shareholders will benefit from the KPS team and its track record of owning manufacturing companies and creating tremendous value.”

KPS, unlocking value in manufacturing

Founded in 1991 by Eugene Keilin, Michael Psaros, and David Shapiro, KPS makes controlling investments in companies that experience a period of transition or need to make changes.

The private equity’s current portfolio of companies is comprised of an impressive list of large and diversified manufacturing companies including fitness equipment supplier Life Fitness; military vehicle company AM General; and golf equipment manufacturer TailorMade.

Michael Psaros, co-founder and co-managing partner of KPS Capital Partners, added: “We are excited to acquire one of the largest metal packaging businesses in Europe.

“The size and scale of the business, the breadth of its products and its critical food safety technology and process disciplines developed over decades, coupled with growing end-markets, are the foundation of a tremendous investment platform.”

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