Crown Holdings secures €1.9B from European tinplate business sale, retains minority stake

12 Apr 2021 --- Crown Holdings (Crown) is selling 80 percent of its European tinplate business to KPS Capital Partners (KPS). Crown will receive pre-tax proceeds of approximately €1.9 billion (US$2.3 billion) from the transaction and retain 20 percent ownership in the business. 

Crown indicates net proceeds will be used for debt reduction, beverage can capital projects and share repurchases over time.

KPS reportedly values the European tinplate business at €2.25 billion (approximately US$2.68 billion).

The business comprises 44 manufacturing facilities in 17 countries in Europe, the Middle East and Africa, producing food cans and ends, aerosol cans, metal closures and promotional packaging for consumer brands.

Billion-dollar business
In 2020, the business generated €1.9 billion (US$2.3 billion) in revenue and approximately €220 million (US$262 million) in estimated standalone EBITDA and had approximately 6,300 employees.

“We are very pleased the European tinplate business will have a strong owner in KPS Capital Partners to support future profitable growth and innovation initiatives,” notes Timothy J. Donahue, Crown’s President and CEO.

“European customers and consumers alike have long embraced metal packaging, valuing the premium product protection and flavor preservation that it offers. The infinitely recyclable food can is unrivaled from a sustainability standpoint, helping eliminate over one billion liters a year in food waste.”

“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.”

Michael Psaros, KPS’ co-founder and co-managing partner, adds: “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.”

Crown expects to use the net proceeds after closing working capital adjustments, taxes and other transaction-related costs to further reduce debt, fund capital projects and repurchase shares over time under its recent US$1.5 billion authorization dated February 25, 2021.Crown’s tinplate business comprises 44 manufacturing facilities in 17 countries in EMEA, producing food cans and ends, aerosol cans and metal closures.

Third-quarter closing
The European tinplate business’ sale is expected to close during the third quarter of 2021 and is subject to certain regulatory approvals and customary closing conditions.

As previously announced, the company will release its earnings for the first quarter ended March 31, 2021, after the close of trading on the New York Stock Exchange on Monday, April 19, 2021.

PackagingInsights recently explored the latest in Crown’s aluminum beverage can innovation in a wide-ranging Special Report.

Edited by Joshua Poole