Belgian carton packaging manufacturer expands into Germany

09 October 2018 Consultancy.eu

Belgian carton packaging manufacturer P. Van De Velde Group has expanded into Germany with the acquisition of Bergische Kartonagenfabrik. 

The acquisition of the German company comes months after P. Van De Velde Group bolstered its footprint in the Netherlands, with the acquisitions of counterparts Wesly Printing & Packaging (Maastricht) and Royal Schut (Eerbeek). The bolt-on is part of the group’s strategy to build a market leader in the Western European market, leveraging a buy-and-build approach, while being better prepared to embrace the broader shift toward folding carton packaging and folding synthetics packaging.

Established in 1931 by Fritz Nießen in Velbert, Bergische Kartonagenfabrik has since inception grown to solid market player in Germany’s packaging industry. The company, together with sister company Coburger Kartonagenfabrik, produces well over 5 million folding boxes daily for both food and non-food organisations in the consumer goods industry, with a focus on companies in Germany, the Netherlands, Belgium and France. These boxes are manufactured from solid fibre board or corrugated cardboard and can be treated with a wide range of coatings and embossments, as well as be customised to customer or sector needs.

Belgian carton packaging manufacturer expands into Germany

The acquisition sees Bergische Kartonagenfabrik and its around 100 employees based in the Velbert production site – which focuses on the production of solid fibre board – join its new Belgian parent. The Coburger Kartonagenfabrik (300 employees) is not part of the deal.

As part of the integration, Bergische Kartonagenfabrik will continue to operate in its current form and the company’s current management team will remain responsible for daily business operations. The German addition will however benefit from the support of centralised services, while extending its product range and client network, opening up avenues for new and previously untapped commercial opportunities, according to a spokesperson of the firm. 

Dealmakers

The Belgian family-run enterprise was advised on during the transaction by M&A experts from three external firms. Fortaleza Capital provided corporate finance advisory (deal team: Alexander van Rossum and Dirk Schut), DELTA Revision supported with financial and tax matters (Klaus Bertram and Jeffrey Larson), while German law firm Oppenhoff & Partner was tapped for legal expertise (Myriam Schilling, Anna-Catharina von Girsewald and Sarah Scharf). 

Seller Bergische Kartonagenfabrik relied on the merger & acquisition services of Nachfolgekontor (corporate finance; Fabian Schmidt and Julian Will), ECOVIS International (tax; Bernhard Umlauft) and Andresen Rechtsanwälte (legal; Alexander Mahlke and Bernd Andresen). 

P. Van De Velde Group further has three locations in Belgium (in Lichtervelde, Kruishoutem and Wetteren) and one in Poland (Poznan).

Firms struggling with turning M&A deals into equity value

18 April 2019 Consultancy.eu

At a time when merger & acquisition activity is on a high, new research highlights that a majority of deals closed aren’t in fact contributing to equity improvements. 

To come to their conclusion, researchers at Willis Towers Watson and Cass Business School analysed the performance of all deals closed in the first quarter of this year with a deal value of above $100 million. For all those deals, 180 in total, the share price of the acquirer was tracked, and benchmarked against an index (MSCI World Index) which monitors equity performance across 20+ developed countries. 

The analysis found that across all regions globally, deals on average had a negative result on the equity value of the acquiring party. Buyers in North America and Asia-Pacific in particular struggled with value creation from their acquisitions. In the US and Canada, companies that were involved in a takeover or merger had a negative performance of 10.1 percentage points compared to the North American index. Asia Pacific buyers lagged 5.0 percentage points behind their regional index. 

Globally, the average stood at 5.4 percentage points behind the index. “The international M&A market as a whole is showing disappointing results, on the back of a volatile transaction climate and global political uncertainty, from trade wars to increasing protectionism,” said Gabe Langerak, a Dutchman who leads Willis Towers Watson’s Mergers & Acquisitions practice for Western Europe.Firms struggling with turning M&A deals into equity valueEurope however bucks the trend and is the only region where large mergers & acquisitions in the first quarter of 2019 had a positive impact on the stock prices (2.8%). Langerak: “The relatively stable – or less unstable – political and economic situation seems to turn out beneficial, and as a result European companies have outperformed their international peers.” It is not just a short term catch – the continent has been performing better for years, with the three-year average at 5.1% above the index. 

Striking, according to the researchers, is that international deals are outperforming national deals. For example, cross-border transactions score 0.9% higher than the index, while cross-regional deals even surpass the index by 3.1%. 

While the ‘financial’ performance of M&A deals is by no means impressive, there are however little signs of deal activity to slow in 2019. “Growing cash reserves, technological disruption and the stagnating growth of emerging markets are still pushing companies towards the M&A market,” explained Langerak. A recent report by Bain & Company found that global merger and acquisition activity spiked last year, growing from $2.9 trillion in 2017 to $3.4 trillion in 2018

The role of private equity, which accounts for a large share of deal activity, is another force lifting M&A activity. Investors are cash rich, and face pressures to spend the money in order to help their backers (mostly institutional investors and family offices) reap better than market average returns. According to one estimate, private equity now sits on $1.7 trillion of funds that is available but can’t be invested (‘dry powder’), with investors struggling with higher multiple and a limited supply of top, well priced targets. “As potential candidates now seem more expensive than during previous M&A peaks, such as in 1999 and 2008, it is more difficult than ever to close successful deals.” 

Langerak concludes with a tip for deal makers; “For M&A experts that want to make a move, it is key to focus on selecting the right acquisition candidates. Proper preparation, integration and the right people are essential to gain the right insights before taking a leap.”