Sealed Air to acquire bagging systems manufacturer in US$510m deal

03 May 2019 --- Sealed Air Corporation has acquired Automated Packaging Systems (APS), a leading manufacturer of automated bagging systems, in a US$510 million deal. The move will strengthen Sealed Air’s portfolio to drive growth in e-commerce, fulfillment and food packaging markets while expanding its automation, direct service expertise and total systems approach.

“APS is a market leader with unique and innovative solutions, complete with automated equipment, materials and services,” says Ted Doheny, Sealed Air President and CEO. “The addition of APS is well aligned with our Reinvent SEE goal of doubling our innovation rate over the next five years. This transaction expands the breadth of our automated solutions and sustainable packaging offerings, giving us access to growth opportunities in the markets we serve.”

Dan Healey, Director of Sustainability for Sealed Air’s Product Care division, highlighted the e-commerce market as one with particular growth potential in a recent interview with PackagingInsights. 

Founded in 1962 with headquarters in Streetsboro, Ohio, APS employs more than 1,200 people, serves customers in over 60 countries and operates seven manufacturing sites in the US and UK. In 2018, APS generated US$290 million in sales, an increase of approximately 10 percent year-over-year.

APS provides full flexible packaging systems, including industry-leading equipment, sustainable materials and technical services. Known for inventing Autobag bagging machines and pre-opened bags on a roll, APS also offers three recycled film solutions under the EarthAware brand.

Sealed Air highlights three core benefits that are to be expected from the transaction:

• Expanding protective packaging with complementary solutions and services.

“APS brings highly complementary and additive capabilities to Sealed Air, including expertise in engineering, automation technology and sustainability, which strengthens the company’s protective packaging solutions.”

• Accelerating innovation and growth.

“APS has a long track record of growth and innovation through machine automation and converting technologies, supported by a robust patent portfolio.”

• Driving growth opportunities, cost synergies and accretive to adjusted EBITDA.

“Sealed Air will benefit from cross-selling opportunities enabling additional growth in key markets. The company also expects cost synergies resulting from supply chain efficiencies. The transaction is expected to be accretive to Adjusted EBITDA in 2019.”

Earlier this year, Sealed Air increased its production of plant-based packaging for food applications. The company is investing in capacity at its Simpsonville, US, facility, which will be the first in the US to produce materials made from Plantic – a bio-based polymer with barrier properties – and post-consumer plastic. Sealed Air’s planned capital investment of US$24 million is underway and production is scheduled to begin in the second quarter of 2020. To support this work, Japan-based Kuraray America, Inc. (Kuraray), a specialty materials company, is investing approximately US$15 million to install plant-based high barrier resin production and supporting capabilities in Houston, Texas. 

In February, the company expanded its Asia Pacific presence with the acquisition of MGM’s flexible packaging business. Founded in 1982, MGM specializes in printing and laminating and provides flexible food packaging materials for consumer packaged goods markets in Southeast Asia. The company also exports to and supports companies in Australia, Brunei Darussalam and New Zealand. Sealed Air plans to leverage MGM’s expertise to expand its printing and lamination capabilities and better serve customers throughout the Asia Pacific region.