US-based private-equity firm Oak Hill Capital Partners is set to acquire plastic, glass and metal containers supplier Berlin Packaging for around $1.43bn, including debt.
Oak Hill has agreed to pay a price for Berlin Packaging that is around 14 times more than the company’s earnings of approximately $100m before interest, taxes, depreciation and amortisation, reported the Wall Street Journal.
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By GlobalDataAccording to the report, Oak Hill will invest roughly $650m in Berlin Packaging, while the rest of the deal will be financed with debt.
This will help Berlin Packaging to repay its exiting obligations and leave it with a debt of close to $765m when the deal closes in September 2014.
The Wall Street Journal further reported that Oak Hill’s acquisition was another deal among many secondary buyouts this year, in which one private-equity investor purchases a company from another.
According to data provider Dealogic, there have been similar deals worth more than $50bn worldwide so far in 2014.
Investcorp Bank acquired a majority stake in Berlin Packaging for around $410m in 2007, according to S&P Capital IQ.
Established in 1898, Berlin Packaging claims to manufacture close to 3.5 billion components every year with more than 90 domestic sales and warehouse locations. The company quotes annual revenue of around $800m.