Packaging Gateway

Daily Newsletter

08 August 2023

Daily Newsletter

CD&R to acquire packaging products distributor Veritiv

Veritiv's board of directors unanimously approved the acquisition.

Private equity company Clayton, Dubilier & Rice’s (CD&R) affiliate has signed a definitive agreement to acquire packaging products distributor Veritiv.

As per the agreement's terms, CD&R has agreed to pay $170 in cash for each share of Veritiv common stock issued and outstanding immediately, before the completion of the transaction.

This amount represents a nearly 31% premium over Veritiv's 30-day volume-weighted average price of $129.89.

According to a Reuters report, this deal is valued at $2.3bn and will transform Veritiv into a private entity.

Veritiv’s board of directors has given its unanimous approval for the transaction and also recommended its shareholders to vote in favour of it.

Veritiv CEO Sal Abbate said: “CD&R's interest in our company is a testament to our team's hard work, innovation, and dedication. Fueled by this partnership, we will continue to evolve towards our greatest potential, delivering innovative and sustainable solutions to our customers today - and into the future.”

Headquartered in Atlanta, US, Veritiv offers packaging, as well as hygiene products, services, and solutions.

The company serves customers in different industries both in North America and across the globe. It manages distribution centres across the US and Mexico.

CD&R partner Rob Volpe said: “We look forward to supporting Veritiv's talented leadership team in this next phase of the company's growth, as they continue to pursue their long-term strategic objectives while maintaining an unwavering commitment to employees, suppliers, and customers.”

Subject to customary closing conditions, the deal is anticipated to be completed in the fourth quarter of this year.

Generative AI remains an untapped potential across the consumer industry

GlobalData estimates the total AI market will be worth $909 billion in 2030, growing at a CAGR of 35.2% between 2022 and 2030. The consumer goods, foodservice, and packaging sectors are undergoing digital transformation, accelerated by the COVID-19 pandemic and changing consumer preferences. AI can help companies operating in these sectors by significantly reducing costs and production times. In Nestlé's 2022 full-year results, the company announced a renewed focus on digitalization to drive growth. Financial and reputational pressures associated with supply chain disruptions and sustainability concerns are also driving interest in the digitalization of supply chains. Data science and ML are strong investments across all areas. However, the sectors cannot stop at AI-powered data analytics applications. They must also explore computer vision (CV), smart robots, AI sensors that automate manufacturing and distribution logistics, and generative AI tools that increase efficiency across corporate departments and customer service operations and enable innovation in product design. For the most part, the consumer goods, foodservice, and packaging sectors will not play a significant role in creating and developing AI hardware or platforms. Instead, these sectors will help scale up the adoption of AI technologies, such as CV, conversational platforms, and smart robots. This adoption will be driven by the financial benefits and potential cost savings AI automation delivers across global supply chains.