Crown Holdings, Inc. announced it has entered into a definitive agreement to sell its European Tinplate business to KPS Capital Partners, LP. Crown will receive pre-tax proceeds of approximately €1.9 billion ($2.26 billion) from the transaction and will retain a 20% ownership stake in the business. The European Tinplate business comprises 44 manufacturing facilities in 17 countries in Europe, the Middle East and Africa that produce aerosol cans, food cans and ends, metal closures and promotional packaging for various consumer brands. In 2020, the business generated €1.9 billion ($2.26 billion) in revenue and approximately €220 million in estimated standalone EBITDA and had approximately 6,300 employees.
“We are very pleased that the European Tinplate business will have a strong owner in KPS Capital Partners to support future profitable growth and innovation initiatives. 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,” commented Timothy J. Donahue, President & Chief Executive Officer.
Michael Psaros, Co-Founder & Co-Managing Partner of KPS, said, “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. We thank Mr. Donahue and Crown for their confidence in KPS and trust in our stewardship of the extraordinary business they have built.”
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 $1.5 billion authorization dated February 25, 2021. For illustrative purposes only, and assuming all net proceeds of the transaction were used to reduce debt, the Company’s estimated pro forma adjusted net leverage ratio at the end of 2021 (excluding all 2021 EBITDA related to the European Tinplate business) would be 2.9x compared to the 3.9x at December 31, 2020.
The sale of the European Tinplate business is expected to close during the third quarter of 2021 and is subject to certain regulatory approvals and customary closing conditions.
Evercore acted as exclusive financial advisor to Crown.
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. The Company will hold a conference call to discuss those results at 9:00 a.m. (EDT) on Tuesday, April 20, 2021. The Company will have no further comment regarding the sale of the European Tinplate business beyond this news release until its earnings call on April 20, 2021.