Novolex (Hartsville, SC), a portfolio company of the Carlyle Group and an industry leader in packaging, has announced that it will acquire the Waddington Group (Covington, KY) from Newell Brands Inc. (Hoboken, NJ) for $2.3 billion. The transaction is expected to close in approximately 60 days.
The acquisition will produce a unit with more than $1 billion in U.S. sales of single-use foodservice items such as takeout containers, cups and bags, according to the Freedonia Group, a Cleveland-based market research firm. Combined, these companies will create a player in the market with a product range as broad as market leaders Dart Container and Pactiv Foodservice. According to Freedonia Group Packaging Analyst Chad Henry, “The strategic move by Novolex capitalizes on two trends that stand to enjoy fast growth the next five years: The increasing popularity of takeout, delivery and eating on-the-go, and growing consumer and restaurant demand for sustainable food packaging.”
The Waddington Group is a global manufacturer and marketer of packaging and disposables serving the foodservice, bakery, deli, produce and confectionery markets. Novolex is a leading provider of packaging solutions serving retail, grocery, foodservice, hospitality, institutional and industrial markets, according to a release from Novolex.
“We are excited to add the Waddington Group to the Novolex family,” said Stan Bikulege, Chairman and CEO of Novolex. “This is a period of strategic growth and development at Novolex. Adding rigid plastic food packaging and an expanded range of sustainable packaging products have been key strategic priorities, and the Waddington Group has long been our top acquisition target. The company brings Novolex world-class product innovation, long-term customer relationships, and, most importantly, adds to our talented and dedicated team. We are excited to have Waddington CEO John Wurzburger and his team join the Novolex family,” said Bikulege.
The Waddington Group’s footprint includes 16 sites in the U.S., Canada, Ireland, Netherlands and U.K. and approximately 3,000 employees worldwide. “The Waddington Group is a great fit for Novolex,” Bikulege added. “The company has a strong track record of developing innovative packaging solutions and, like Novolex, is a market leader in sustainability.”
The acquisition of the Waddington Group is Novolex’s eighth since 2012, which include Shields Bag & Printing (January 2018), Burrows Packaging (December 2016), Heritage Bag (April 2016), Wisconsin Film & Bag (September 2015), Packaging Dynamics (December 2014), Duro Bag (July 2014) and a portion of Clondalkin Group’s North American Flexible Packaging Division (April 2013). With the addition of the Waddington Group, Novolex will have approximately 10,000 team members and 62 manufacturing plants worldwide.
Newell Brands announced plans in January of this year to “transform” the company by selling its smaller consumer businesses such as Rawlings, Goody, Rubbermaid Outdoor, Closet, Refuse & Garage, and U.S. Playing Cards as well as industrial commercial products including Waddington, Process Solutions, Rubbermaid Commercial Products and Mapa.
Newell anticipates that the plan will result in a 50% reduction in the company’s global factory and warehouse footprint and a 50% reduction in its customer base and will consolidate 80% of global sales on two ERP platforms by the end of 2019, said a January 2018 release from Newell Brands.
Newell Rubbermaid acquired Jarden Corp. in December 2015 for $15 billion and renamed the company Newell Brands in 2016. Jarden Corp. began with the spin-off of Ball Canning. Under the direction of CEO Martin E. Franklin, Jarden acquired dozens of consumer companies ranging from Yankee Candle, Diamond Match and U.S. Playing Cards to small household appliance makers such as Sunbeam, Mr. Coffee and Oster. It also acquired the rights to Rival and Crockpot from the Holmes Group.
The Freedonia Group noted that Novolex is currently a top 10 player in the foodservice disposables market with dominant positions in plastic and paper bags. The Burrows Paper’s Packaging division added clamshell containers, coffee sleeves, and sheets used to wrap food items. The Waddington Group acquisition broadens their product range even further.
If the deal proceeds as planned, Novolex will acquire the three divisions of the Waddington Group including POLAR PAK, WNA and Eco-Products, said the Freedonia Group. These divisions produce cutlery, cups for hot and cold beverages, napkins and catering ware, including plates and bowls. Eco-Products specializes in foodservice items that are compostable or made with a high degree of recycled content. “Calls for food packaging that has minimal negative environmental impact are growing louder and show no signs of leveling off,” commented Freedonia Group’s Henry.