New York, NY, United States (4E) – Oak Hill Capital Partners, the private equity buyout firm, had finalized an agreement for the acquisition of Berlin Packaging LLC. The price of the said purchase, according to individuals familiar with the transaction, would be at USD1.43 billion, including outstanding debt.
There was a bidding war for the Chicago based company, whose main business include the distribution of plastic, glass and metal containers. The final bids submitted were reviewed by the company and the winning bidder Oak Hill finalized the terms with Berlin Packaging. The deal would be made public by Monday, according to people familiar with the transaction.
The transaction would still be subject to HSR approval and other conditions for closing. The full transaction is expected to close by the 3rd quarter of 2014.
According to Oak Hill Capital Partners Managing Partner Tyler Wolfram, “The transaction is representative of Oak Hill’s theme-based investment approach and long history of partnering with world-class entrepreneurs and management teams.”
For its part, Andrew Berlin said, “We are extremely pleased to be partnering withOak Hill. Oak Hill has a longstanding history of building superior businesses and a reputation for strong partnership with management. It was important to join with a firm that shares the same culture and belief system as Berlin Packaging and that is committed to growing our company by offering increased value to our customers, suppliers, and employees. I know Oak Hill will be a tremendous partner for us. We would also like to thank Investcorp for their partnership over the last seven years.”
The financial advisors of Berlin Packaging are Barclays Capital and Deutsche Bank. For Oak Hill, Morgan Stanley advised Oak Hill as to the transaction. The underwriters include the New York branch of Deutsche Bank AG, Deutsche Bank Securities Inc and Morgan Stanley Senior Funding Inc, who would also provide the first and second lien financing.
Berlin was established in 1898 and has business interests in 90 sales and warehouse locations all across the North America.
Investcorp., the original owners of Berlin, sold the interest with the goal to raise cash for future endeavors. According to Investcorp Managing Director Kevin NIckelberry, “Andrew Berlinand the entire Berlin Packaging management team have done an outstanding job of building a market leading company with a highly differentiated business model and a track record of strong financial performance. Over the course of our partnership, Berlin Packaging improved its profitability, delivered strong organic growth, and executed several strategic add-on acquisitions. We are proud of what we accomplished with the Berlin Packaging team and we wish them continued success with Oak Hill.”
This is another example of secondary buyouts done in 2014. A secondary buyout is when a private equity investor purchases a company’s interest from its owner. The purchase price for Berlin is nearly 14 times the USD100 million EBITDA ratio of the company. Because of the continuous growth of Berlin in the past two decades, showing growth even during the recession, is what made the company so viable for many equity purchasers.