Bemis signs agreement to acquire Food Americas' Alcan Packaging for USD1.2bn

Packaging company Bemis Company Inc (NYSE:BMS) enters a definitive agreement to acquire Food Americas operations of Alcan Packaging for USD1.2bn, the company reported on Sunday.

A specialty packaging company and a business unit of mining group Rio Tinto plc (LON: RIO) (ASX: RIO), Alcan Packaging operates from Paris and has 129 facilities with 29,000 employees in 31 countries.

Bemis will acquire 23 Food Americas facilities in the US, Canada, Mexico, Brazil, Argentina and New Zealand that produce flexible packaging for the food and beverage industries by the end of 2009, subject to customary closing conditions.

Alcan Packaging Food Americas recorded net sales of USD1.5bn and adjusted EBITDA of around USD166m for the year ended 31 December 2008.

As an assets purchase, tax benefits of an estimated USD100m makes the purchase price represent an adjusted EBITDA multiple of about 6.7 times, while further adjusting the valuation for estimated annual run-rate synergies of USD65m, the adjusted EBITDA is a multiple of about 4.8 times. The transaction will be accretive to Bemis' diluted GAAP earnings per share starting 2010.

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