Silgan stock surges 5.5% on $3.4B Trivium acquisition deal

Investing.com -- Silgan Holdings (NYSE: SLGN) shares rose 5.5% Monday after the company announced plans to acquire Trivium Packaging in a $3.4 billion deal, partnering with American Industrial Partners to create a combined metal packaging business.

The transaction will merge Silgan’s Metal Containers segment and Food and Beverage Flat Cap Closures businesses with Trivium to form Silgan Metal Containers and Closures. The all-cash acquisition values Trivium at an enterprise value of approximately $3.4 billion, representing 7.1x last twelve months Adjusted EBITDA, or 4.8x including expected synergies of $225 million.

Silgan will receive approximately $2.3 billion in cash proceeds and retain a 60% controlling ownership interest in the new entity, while AIP will own the remaining 40% and contribute approximately $1.0 billion in cash equity. The cash proceeds will be used to retire certain existing debt.

The combined business will create what the company described as a $7.3 billion diversified global metal packaging operation serving food and beverage markets. The transaction values Silgan’s contributed businesses at an enterprise value of $3.8 billion, representing 8.1x LTM Adjusted EBITDA.

Silgan expects the deal to drive at least 15% accretion to adjusted EPS and free cash flow, including the expected synergies. The company anticipates generating $225 million in synergies by the end of year three through procurement, operational, and SG&A initiatives. Annual synergies are expected to reach approximately $75 million in year one and $150 million in year two.

Silgan’s Dispensing and Custom Containers businesses will be combined into a new segment called Silgan Dispensing Solutions, which will remain wholly owned by Silgan.

The transaction, which has been unanimously approved by Silgan’s Board of Directors, is expected to close mid-2027, subject to regulatory approvals, completion of works council consultation processes, and other customary closing conditions.

Upon completion, the Board of Directors of Silgan MCC will include three directors nominated by Silgan and two nominated by AIP. Silgan’s headquarters will remain in Norwalk, Connecticut.

Original Article

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