packaging investment banking sector report · packaging investment banking selected william blair...

William Blair’s investment banking group combines signi icant transaction experience, rich industry knowledge, and deep relationships to deliver successful advisory and inancing solutions to our global base of corporate clients. We serve both publicly traded

and privately held companies, executing mergers and acquisitions, growth inancing, inancial restructuring, and general advisory projects. This comprehensive suite of

services allows us to be a long-term partner to our clients as they grow and evolve. From 2010-2014, the investment banking group completed more than 330 merger-and-acquisition transactions worth $73 billion in value, involving parties in 36 countries and ive continents, was an underwriter on more than 20% of all U.S. initial public offerings,

and raised nearly $100 billion in public and private inancing.About William Blair Investment Banking

Sector UpdateMay 2015

Packaging Investment Banking Sector ReportIn this Issue:– Sector Trends and Insights– M&A Activity– Valuation Analysis

Packaging Investment Banking

Paul M. Hindsley Managing [email protected]+1 312 364 8576

Elliot FarkasManaging [email protected]+1 312 364 8157

William Blair

Packaging Investment Banking Investment Banking Team Biographies

Investment Banking Team Biographies

William Blair Packaging Investment Banking

Paul M. Hindsley, Managing Director, has been a member of the William Blair Investment Banking department since 1997. Paul has 34 years of experience advising on mergers and acquisitions, private placement of equity and debt securities, and public offerings and has completed over 250 transactions. Before joining the firm, Paul worked at Nesbitt Burns Securities and Harris Bank as a senior banker for middle-market companies.

Paul received a B.A. from Duke University and an M.B.A. from Northwestern University.

[email protected]

+1 312 364 8576

Elliot Farkas, Managing Director, has been a member of the William Blair Investment Banking department since 2006 and is based in Chicago. Elliot has more than 15 years of experience advising on buy and sell-side mergers and acquisitions, fairness opinions, private placements, recapitalizations, and public offerings and has completed over 75 transactions. Before joining the firm, Elliot worked at Robert W. Baird & Co. in the manufactured products investment banking group and at PricewaterhouseCoopers in the transaction services and audit and assurance advisory groups.

Elliot received an M.B.A. in finance from the University of Michigan and a B.S.B.A. in accounting from The Ohio State University. He is also a CPA.

[email protected]

+1 312 364 8157

William Blair

Packaging Investment Banking Selected Recent William Blair Packaging Transactions

Selected Recent William Blair Packaging Transactions

$110,000,000

has been acquired by

Wingate Partners

February 2015

Not Disclosed


The Lubrizol Corporation

July 2014

Not Disclosed

has entered into a strategic alliance with

Fabrica de Papel San Francisco, S.A. de C.V.

June 2014

Not Disclosed


Olympus Partners

May 2014

Not Disclosed

has sold select assets to

WNA, Inc.

March 2014

Not Disclosed


Pactiv, LLC

March 2013

Not Disclosed


Schattdecor AG

January 2013

£81,000,000


Graphic Packaging Holding Company

December 2012

Not Disclosed

a division of Pregishas been acquired by

Monitor Clipper Partners

October 2012

Not Disclosed


Graham Partners

September 2012

Not Disclosed

North American Operationshas been acquired by

Arclin, Inc.

July 2012

$156,000,000


Omnicell, Inc.

May 2012

Not Disclosed

has acquired

Hoffmaster Group, Inc.

December 2011

€160,000,000

A division of Pregis Corporation


Sun Capital Partners

December 2011

$125,000,000

a division of Pregis Corporation


Boise, Inc.

December 2011

$181,700,000


Phillips Plastics Corporation

August 2011

William Blair

Packaging Investment Banking Selected William Blair Packaging Transactions

W

W

W

Selected William Blair Packaging Transactions

Myers Industries Case Study

illiam Blair acted as the exclusive financial advisor to Myers Industries, Inc. in connection with the sale of its lawn and garden division to Wingate Partners.

Myers Lawn & Garden is the leading North American manufacturer of plastic plant and flower containers for the greenhouse, nursery, and retail markets. The company provides a full range of products, including plastic pots, trays, flats, inserts, hanging baskets, decorative planters, and other specialty products and accessories to growers, distributors, and retailers.

Myers Industries, Inc. is a diversified, international manufacturer of plastic and rubber products for industrial, agricultural, automotive, commercial, and consumer markets. The company is also the largest wholesale distributor of tools, supplies, and equipment for the tire service and undervehicle repair industry.

Wingate Partners is a Dallas-based private equity firm with a history of more than 25 years of investing in middle-market manufacturing, distribution, and services businesses. The firm has completed 78 transactions in 25 industries and strives to create value by supporting management in its efforts to improve the operations of its portfolio companies.

Orchids Case Study

illiam Blair and Company acted as financial advisor to Orchids Paper Products Company (NYSEMKT:TIS) in connection with establishing a strategic alliance with Fabrica de Papel San Francisco, S.A. de C.V. The

transaction closed on June 4, 2014.

Orchids paid Fabrica a combination of cash and Orchids’ stock under various agreements to acquire Fabrica's current U.S. business, including certain Mexicali, Mexico-based manufacturing assets, access to 25,000 metric tons of Fabrica’s capacity each year, and a long-term supply agreement. In addition, under the terms and conditions of the agreements, Fabrica will remain a long-term holder of Orchids’ stock, further emphasizing strategic intent and interest of both companies to remain long-term partners. Orchids expects this alliance will support the growth of Orchids’ Western U.S. sales and help realize Orchids' vision to become a national supplier of high-quality consumer tissue products in the value, premium and ultra-premium tier markets.

Based in Prior, Oklahoma, Orchids Paper Products Company is an integrated manufacturer of tissue paper products serving the at-home private-label consumer market. From its operations in northeast Oklahoma, Orchids produces a full line of tissue products, including paper towels, bathroom tissue, and paper napkins, to serve the value through premium quality market segments.

Based in Mexicali, Baja California, Mexico, Fabrica is a recognized world-class, low-cost manufacturer of high-quality tissue paper products. Fabrica is a privately owned business that started as a tissue converter in 1958 and has grown to 150,000 metric tons of capacity, one of the largest tissue manufacturers by capacity in Mexico. In 2013, Fabrica started up the world's first NTT paper machine.

Pregis Corporation Case Study

illiam Blair & Company acted as financial advisor to Pregis Corporation, a portfolio company of AEA Investors, in connection with its sale to Olympus Partners. Terms of the transaction were not disclosed.

Based in Deerfield, Illinois, Pregis Corporation is a leading global provider of innovative protective packaging materials and systems. The company offers solutions for a wide variety of consumer and industrial market segments, including food, beverage, healthcare, medical devices, agricultural, e-commerce, retail, automotive, furniture, electronics, construction, and military/aerospace. Pregis’s high-growth systems business provides a high-margin, recurring revenue stream.

AEA is a private equity firm focused on middle-market companies and is based in New York. AEA focuses on control buyouts in four industry sectors: value-added industrial products, specialty chemicals, consumer products, and related services.

Olympus Partners is a private-equity firm focused on providing equity capital for middle-market management buyouts and for companies needing capital for expansion. Olympus is an active, long-term investor across a broad range of industries, including consumer products, healthcare, financial services, and business services.

$110,000,000

William Blair & Company is pleased to announce that


William Blair & Company acted as exclusive financial advisor to Myers Industries

in the above transaction

February 2015

Not Disclosed


has entered into a strategic alliance with

William Blair & Company acted as exclusive financial advisor to Orchids


May 2014

Not Disclosed



William Blair & Company acted as exclusive financial advisor to Pregis Corporation


May 2014

William Blair

Packaging Investment Banking Table of Contents

Table of Contents

Industry Review and Outlook ................................................................................................................................................................................................................... 1

Recent Notable Packaging Transactions ............................................................................................................................................................................................. 3

Current Industry Trends ............................................................................................................................................................................................................................. 7

Public Packaging Company Valuations ............................................................................................................................................................................................. 11

Notes .................................................................................................................................................................................................................................................................. 15

Disclosures ...................................................................................................................................................................................................................................................... 16

William Blair

Packaging Investment Banking Industry Review and Outlook 1

Industry Review and Outlook

M&A Activity

M&A activity in the packaging sector experienced a robust 2014, with transaction activity increasing 6.9%, in line with the overall global M&A market which increased roughly 7% (the middle market increased 1.9%) during the same period. Activity was strong during both the first and second halves of the year, with the second half down slightly from the first half but up 6.6% from the second half of 2013. Transaction activity was strongest during the fourth quarter of 2014, up 3% sequentially over the third quarter and up 4% over the fourth quarter of 2013. We noted a marked increase in overall market activity in the second half of 2014 and this momentum has carried into the first half of 2015.

Global Packaging Sector Transaction Volume(1)

(number of deals)

Global Packaging Sector Transaction Value(1)

($ in millions)

(1) Aggregate volume and value includes all announced deals. Sources: Dealogic and William Blair’s Mergers and Acquisitions market analysis.

Aggregate transaction value also increased significantly year-over-year, principally due to an increase in large-sized deals, many of which were absent in 2013. Deal value in 2014 was driven by a large number of $750 million-plus transactions, such as the Carlyle Group’s acquisition of Signode Packaging Systems ($3.2 billion), Wendel’s acquisition of Constantia Flexibles Group ($2.8 billion), and Clayton Dubilier & Rice’s acquisition of Mauser ($1.7 billion). Other notable transactions in 2014 were Oak Hill Capital Partner’s purchase of Berlin Packaging ($1.4 billion), as well as Montagu’s purchase of Rexam’s pharmaceutical devices and prescription packaging division ($805 million), Olympus Partners’ purchase of Pregis for an undisclosed amount, and Rhone Group’s purchase of Ranpak. We believe that packaging M&A activity will remain strong throughout 2015 as the domestic and global economies continue to improve and as factors such as debt financing multiples, the abundance of private-equity capital, and the need for strategic growth continue to drive M&A activity.

204 194 202 224 298 304

256 212

244 288 290 277 296

140 137 150 146 82

0

100

200

300

400

500

600

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 1H '13 2H '13 1H '14 2H '14 Q1 '15

Median: 256

+7.1%

+6.6%

$17,292 $17,854

$13,063

$32,366

$24,464

$38,098

$20,957

$10,025

$21,451 $25,629

$20,517 $18,893

$31,282

$8,506 $10,387 $14,471

$16,811 $20,398

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 1H '13 2H '13 1H '14 2H '14 Q1 '15

Median: $20,957

+70.1%

+61.9%

William Blair

Packaging Investment Banking 2 Industry Review and Outlook

M&A Valuations

As illustrated in the following exhibit, median M&A transaction multiples for the packaging sector trended higher in 2014. Packaging M&A multiples increased to a median of 8.7 times LTM EBITDA in the second half of 2014 compared with a median of 7.7 times during the first half of 2014. M&A multiples are now slightly above the longer-term median of 7.8 times and are approaching the levels seen in the 2007 peak.

Historical Packaging Sector M&A Transaction Multiples (Global)

Sources: Dealogic and William Blair.

Public Company Valuations

Similarly, multiples for publicly traded packaging companies continue to trend higher along with the broader market. Public-company valuations rose meaningfully during 2014, closing at a median LTM EBITDA multiple of 9.6 times, continuing the steady rise from the lows of 2009. Public company packaging multiples are now well above the median of the last several years of 7.6 times.

Publicly Traded Packaging Sector Valuation Multiples(1)

(1) Median EV/LTM EBITDA multiples at the end of each respective quarter for publicly traded companies shown on pages 11 and 12 of this report. Source: Capital IQ.

Summary

The outlook for the global economy continues to show signs of improvement, led by relatively strong U.S. economic growth prospects. Most economic data points to a continued steady recovery, while CEO confidence and investor sentiment are generally on the rise. We believe that packaging M&A activity will be driven by this increased confidence, improved global economic growth, and the continued need for financial buyers to invest committed fund equity. Similarly, strategic buyers remain flush with cash and continue to aggressively look to enter new geographies, expand capabilities, and expand product and end-market breadth.

─ Paul Hindsley

─ Elliot Farkas

7.9x7.8x 7.8x 7.6x

8.3x9.3x 8.9x

6.7x

7.5x8.4x

7.2x 7.5x8.3x

7.1x 7.5x 7.7x8.7x 8.4x

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 1H '13 2H '13 1H '14 2H '14 Q1 '15

Median: 7.8x

EV / LTM EBITDA Median

6.1x 6.2x

6.7x 6.9x 6.8x 6.9x 6.6x 7.3x 7.5x 7.4x 6.8x 7.3x8.1x 7.6x 7.7x 7.8x

8.6x 8.8x 9.0x 9.2x 8.8x9.8x

9.2x 9.6x 9.4x

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

Q12009

Q22009

Q32009

Q42009

Q12010

Q22010

Q32010

Q42010

Q12011

Q22011

Q32011

Q42011

Q12012

Q22012

Q32012

Q42012

Q12013

Q22013

Q32013

Q42013

Q12014

Q22014

Q32014

Q42014

Q12015

Median: 7.6x

William Blair

Packaging Investment Banking Recent Notable Packaging Transactions 3

Recent Notable Packaging Transactions

Announced: 2/5/15 Observations / Rationale:

Target:

Rexam manufactures and sells aluminum and steel cans for carbonated soft drinks, beer, energy drinks, and other beverage categories worldwide. Ball Corporation supplies innovative, sustainable packaging solutions for beverage, food, and household products customers, as well as aerospace and other technologies and services primarily for the U.S. government.

Transaction will create the world’s largest drink can manufacturer with production of more than 120 billion cans annually; combined entity will serve more than 60% of the market in North America, Europe, and Brazil

The merger is expected to generate roughly $300 million of synergies by 2018; synergies related to G&A, sourcing, freight, and operational efficiency

Potential for anti-trust scrutiny in North America, Europe, and Brazil, which may require substantial disposals of can manufacturing plants in overlapping areas such as the United Kingdom and Germany

London, United Kingdom

Acquirer:

Broomfield, CO Key Metrics: Implied Enterprise Value ($M): EV/LTM Revenue: EV/LTM EBITDA:

$8,515.5

1.46x 9.6x


Target:

MeadWestvaco Corporation provides packaging solutions to the healthcare, beauty and personal care, food, beverage, home and garden, tobacco, and agricultural industries worldwide. RockTenn is one of North America’s largest providers of packaging solutions and manufacturers of containerboard and paperboard.

The merger will create a $16 billion global provider of consumer and corrugated packaging with over 300 operating locations globally

RockTenn will benefit from the immediate exposure to the BRIC countries including MeadWestvaco’s Brazilian containerboard subsidiary, Rigesa, which will fit well with RockTenn’s North American business

The merger is expected to generate an estimated $300 million in annual cost synergies to be realized by the end of the third year; further ability to reduce annual cash contributions to pension plans by $300 million through the combination of the plans

Richmond, VA

Acquirer:

Norcross, GA Key Metrics: Implied Enterprise Value ($M): EV/LTM Revenue: EV/LTM EBITDA:

$10,789.2

1.94x 11.5x


Target:

Clearwater Paper’s specialty products business includes five specialty tissue and machine-glazed paper mills in Mississippi, Michigan, Connecticut, New York, and Ontario. Dunn Paper, a Wingate Partners’ portfolio company, manufactures a wide array of specialty papers that are converted into labels, wraps and food-service paper products, including wax-coated paper, sandwich wraps, heat-seal pouches, fire-log wraps, specialty napkins, soap wraps, beverage labels, candy wrappers, coffee bags, and other products.

Acquisition included nine paper machines with more than 200,000 tons of production capacity across product lines including coated paper, specialty napkins, towels and tissues, and wet crepe

Clearwater Paper’s motivation to sell the mills stemmed from attractive capital investment opportunities in its Consumer Products Division which are expected to have the potential to expand EBITDA margins by about 350 basis points over three years

Dunn Paper Inc. does not plan to change the operations or staffing at any of the five acquired mills

(Specialty Products Business and Mills) Spokane, WA

Acquirer:

(Wingate Partners)

Port Huron, MI Key Metrics: Implied Enterprise Value ($M): EV/LTM Revenue: EV/LTM EBITDA:

$113.5

0.52x 6.2x

William Blair

Packaging Investment Banking 4 Recent Notable Packaging Transactions


Target:

Charter NEX Films, Inc. is a North American leader in engineering, extruding, and manufacturing superior-quality monolayer, coextruded, and barrier films for flexible packaging applications. Pamplona Capital Management is a specialist investment manager that provides an alternative investment platform across private-equity, fund of funds, and single manager hedge fund investments.

Charter NEX represents the combination of Charter Films and NEX Performance Films, which were acquired by Mason Wells in 2012 and 2010, respectively

Charter NEX holds a leading position within flexible food and consumer product packaging, and strong, growing positions in medical, pharmaceutical, and industrial surface protection segments

Highly attractive secular trends in flexible packaging (e.g., pouches) were a key component of Pamplona’s investment thesis

(Mason Wells) Milton, WI

Acquirer:

London, United Kingdom Key Metrics: Implied Enterprise Value ($M): EV/LTM Revenue: EV/LTM EBITDA:

Proprietary Proprietary Proprietary


Target:

Constantia Flexibles group produces flexible packaging and labelling solutions, principally for the food, pet food, pharmaceuticals and beverage industries. Wendel is a private-equity firm focused on providing equity capital for middle market leveraged buyouts.

The acquisition represents a significant milestone in Wendel’s 2013-2017 strategy of investing €2 billion in the top-tier unlisted companies in Africa, North America, and Europe

Constantia’s technological capabilities, ability to innovate, long-standing relationships with large, global customers, and top five ranking in segments of operations were key attractive characteristics to Wendel

Transaction provides Constantia Flexibles with the opportunity to further pursue growth investments and strategic acquisitions in the highly fragmented flexible packaging industry

(One Equity Partners) Vienna, Austria

Acquirer:

Paris, France Key Metrics: Implied Enterprise Value ($M): EV/LTM Revenue: EV/LTM EBITDA:

$2,816.7

1.41x 9.9x


Target:

Tri-Delta Plastics is a manufacturer of proprietary rigid packaging products for the food, healthcare, and household chemicals end-markets. Pretium Packaging, LLC is one of the United States’ largest manufacturers of customized, high-performance rigid blow-molded plastic bottles and containers.

Pretium Packaging was attracted to Tri-Delta Plastics’ business philosophy, strong closures business, and leadership position in the spice market; represents a market category currently not served by Pretium

Tri-Delta's proven ability to expand its product portfolio into new end-markets, including healthcare and household chemicals, lends itself to Pretium’s organic growth initiatives

Represents Pretium’s first acquisition under Genstar’s ownership and is consistent with Genstar’s strategy to grow Pretium both organically and through selective acquisitions that expand its markets, technologies and geographic reach to allow it to better serve its customers

Hillsborough, NJ

Acquirer:

(Genstar Capital) Chesterfield, MO

Key Metrics: Implied Enterprise Value ($M): EV/LTM Revenue: EV/LTM EBITDA:

ND ND ND

William Blair

Packaging Investment Banking Recent Notable Packaging Transactions 5


Target:

Promens is a leading global manufacturer of plastic packaging solutions for the food, cosmetics, chemicals, and pharmaceuticals industries. Promens incorporates production methods such as blow molding, thermoforming and injection molding as well as rotational molding, of which the company is the largest manufacturer in the world. RPC is an international rigid plastic packaging supplier to the food and non-food, consumer, and industrial markets. It operates through its injection molding, thermoforming, and blow molding segments.

Promens will provide RPC with enhanced scale across its core European end markets

Transaction represents RPC’s fourth acquisition in the past 12 months; purchased Maynard & Harris (U.K.), Helioplast (Bosnia), and Ace Holdings (Hong Kong)

RPC expects to achieve synergies of €10 million in the first year from improved working capital management in addition to ongoing annual synergies of €15 million by the third year

Kopavogur, Iceland

Acquirer:

Rushden, United Kingdom Key Metrics: Implied Enterprise Value ($M): EV/LTM Revenue: EV/LTM EBITDA:

$498.0

Proprietary Proprietary


Target:

Huhtamaki Films (DBA Infiana Group) develops, produces, and finishes plastic-based release liners and other specialized films. Deutsche Beteiligungs AG is a Germany-based private-equity firm focused on investing in well-positioned, midsized companies with growth potential in selected sectors.

Huhtamaki Films diverse product portfolio ranges from the outer layer of baby diapers to acoustic and thermal insulation to films for sealing sewage pipes

Nearly three-quarters of Huhtamaki Films’ products represent individually customized solutions to meet customers’ specific needs

Huhtamaki’s divestment supports its growing focus on its core food-packaging business

Deutsche Beteiligungs was attracted to Huhtamaki Films’ innovative strength and broad customer base

(Films Business) Espoo, Finland

Acquirer:

Frankfurt, Germany Key Metrics: Implied Enterprise Value ($M): EV/LTM Revenue: EV/LTM EBITDA:

$176.0

0.80x Proprietary


Target:

Clondalkin’s Specialist Packaging Division (“SPD”) is a leading global provider of a broad suite of specialty secondary packaging solutions for the pharmaceutical and health and personal care industries. Essentra plc is a leading international supplier of specialty plastic, fiber, foam, and packaging products.

Clondalkin SPD’s product portfolio of folding carton, product literature, and labels is complementary to Essentra’s current packaging and authentication capabilities

Acquisition significantly enhances Essentra’s existing geographic presence in healthcare packaging and, by leveraging the combined footprint of the two businesses, Essentra will be able to further exploit existing and attractive new growth opportunities

Cost synergies arising from the transaction and associated restructuring are anticipated to be at least $16 million in 2016

(Specialist Packaging Division) Noord-Holland, Netherlands

Acquirer:

Milton Keynes, United Kingdom Key Metrics: Implied Enterprise Value ($M): EV/LTM Revenue: EV/LTM EBITDA:

$455.0

1.10x 8.2x

William Blair

Packaging Investment Banking 6 Recent Notable Packaging Transactions


Target:

Packaging Dynamics manufactures a broad portfolio of flexible, paper-based food packaging products including specialty bags, specialty sheets and wraps, interfolded tissue, pan liners, and freezer/butcher paper products, as well as specialty laminated foil products. NOVOLEX (fka: Hilex Poly) is a leading North American manufacturer of paper and plastic flexible packaging products including retail and specialty bags, food packaging products, and a broad range of specialty films and laminated products.

The combined company will have revenue of roughly $1.9 billion, operating across 35 manufacturing locations in North America and a world-class recycling center

NOVOLEX was attracted to Packaging Dynamics strong presence in foodservice and ability to offer eco-friendly products meeting consumer demand for “green” packaging solutions

Transaction represents NOVOLEX’s third acquisition following the acquisition of Clondalkin Group’s North American Flexible Packaging division (2013) and Duro Bag Manufacturing Company (2014)

Chicago, IL

Acquirer:

Hartsville, SC Key Metrics: Implied Enterprise Value ($M): EV/LTM Revenue: EV/LTM EBITDA:



Target:

Carr Management, Inc. (“CMI”) is a specialized manufacturer of blow-molded, high-density polyethylene bottles for the dairy, water, food, industrial, and nutraceutical industries. CMI offers a wide selection of blow-molded products along with the ability to provide custom-design service to meet specific client needs. Behrman Capital is a private-equity firm specializing in management buyouts, leveraged buildups, and recapitalizations of established growth businesses across four distinct industries: healthcare, specialty manufacturing, business to business outsourcing, and defense.

CMI distinguishes itself through service, quality, and flexibility. The company’s highly regarded reputation for operational excellence was a key investment highlight for Behrman

Behrman was attracted to CMI’s long-term customer relationships and will look to expand the business via organic growth through CMI’s customer-first philosophy

CMI fits well with Behrman’s investment thesis for the packaging industry; investment represents Behrman’s third current investment in a packaging-related asset

Nashua, NH

Acquirer:

New York, NY Key Metrics: Implied Enterprise Value ($M): EV/LTM Revenue: EV/LTM EBITDA:


William Blair

Packaging Investment Banking Current Industry Trends 7

Current Industry Trends

Resin Prices Trends

Resin prices rose, on average, 3.0% during the first half of 2014, before declining 6.0% during the second half of the year. In 2015 thus far, resin prices have continued to decline, down 4% from the beginning of the year. Most analysts believe that sustained lower natural gas prices coupled with increased ethylene cracker capacity in the United States will result in a gradual decline in resin prices, and expect this trend to continue throughout the remainder of 2015.

Resin Prices

(Index Price vs. Jan-05; vs. Jan-14)

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

(1) Composite represents index of all five resin types shown here. Sources: Bloomberg, Plastics News, Foundation for Internal Business and Economic Research, Wall Street Journal, and Department of Energy.

Polyethylene terephthalate (PET), after increasing to $0.99 per pound in January, spent the middle half of 2014 hovering around $0.94 per pound before increasing to $0.98 in December, leaving 2014 down 1.0%.

Polyvinyl chloride (PVC) continued to increase through the majority 2014, finishing the year at $1.15 per pound.

Polyethylene (PE), reached a high of $1.08 in September 2014 following a relatively flat 2013.

Polystyrene (PS) spent 2014 on average at about $1.55 per pound.

Polypropylene (PP) experienced a high of $1.21 per pound during 2014 before ending the year at about $1.16 per pound.

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

Crude Oil (+17.2%; -50.4%) PET (Bottle Resin) (+29.9%; -8.4%) PVC (Suspension Resin Injection GP) (+100.9%; -4.4%)

PE (Injection GP) (+39.7%; -12.4%) PS (EPS Cups) (+25.1%; 0.0%) PP (Extrusion Sheet) (+36.9%; -17.2%)

LTM Highlights

Apr-Sep '14 composite(1) (+0.5%)Oct-Mar '15 composite(1) (-13.6%)

(+17.2%)

(+39.7%)

(+100.9%)

(+36.9%)

(+25.1%)

(+29.2%)

William Blair

Packaging Investment Banking 8 Current Industry Trends

Earnings Continue to Improve

Earnings in 2014 for William Blair’s group of publicly traded packaging companies (see pages 11 and 12) have continued to rebound, up roughly 75% since the lows of 2009. This rebound continues a modest and stable upward trend since the downturn that ended in first quarter 2009. As shown in the exhibit below, earnings have grown at a 9.3% compound annual rate since achieving a trough in first quarter 2009. Earnings growth has been driven by a continued focus on cost reductions, relatively stable resin prices, and revenue growth as a result of an improving global economy.

Publicly Traded Packaging Companies – Total Operating Income Per Share(1)

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2009 2010 2011 2012 2013 2014 2015

(1) Total operating income per share for the LTM period ending each respective quarter for all publicly traded companies shown on pages 11 and 12 of this report. Source: Capital IQ.

EBITDA Margin Trends

In the start of 2014, EBITDA margins improved slightly by 10 basis points before leveling off near 14% for the packaging companies tracked by William Blair, slightly above the longer-term median of 13.2%. This reflects a marked increase from the lows experienced in first quarter 2009. The slight increase over 2013 reflects the impact of continued fixed cost leverage as revenues have continued to grow, as well as the impact of declining resin prices in late 2014 and early 2015.

Publicly Traded Packaging Companies – LTM EBITDA Margins(1)

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2009 2010 2011 2012 2013 2014 2015

Source: Capital IQ.

$55.5$57.4

$62.7$63.7 $59.4

$60.4$63.6 $64.9

$69.4$69.1 $68.0 $68.7

$72.3$74.7

$77.2 $78.9 $81.2$80.5

$83.4 $88.2$89.1 $93.6

$96.7 $95.9 $96.8

$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

12.5% 12.6% 13.3% 13.7% 13.4% 13.4% 13.6% 13.2% 13.2% 13.0% 13.1% 13.2% 13.0% 13.0% 13.2% 13.1% 12.8% 13.1% 13.1% 13.4% 13.5% 13.6% 13.7% 13.5% 13.5%

0.0%

5.0%

10.0%

15.0%

Median: 13.2%

William Blair

Packaging Investment Banking Current Industry Trends 9

Strategic Versus Financial Sponsor Transactions

As a percentage of total packaging transactions, financial sponsor activity increased modestly year-over-year in 2014, accounting for 31% of total transactions. Financial sponsors, whether through existing portfolio companies or as new platform investments, continue to be active investors in the packaging sector. Strategics have dominated activity thus far in 2015, although we expect this trend to balance out as the year progresses.

Strategic vs. Financial Sponsor Packaging Transactions (% of Total Global Packaging Transactions)

Sources: Dealogic and William Blair’s analysis.

Emerging Market M&A Transaction Activity

During 2014, emerging market activity in the packaging sector experienced a slight pullback from 2013, with emerging markets packaging M&A accounting for 20% of the market. In 2014, emerging market countries outside the traditional BRIC nations saw their share of activity rise from 43% of emerging markets packaging activity in 2013 to 64% in 2014. Activity in India decreased from 15% of activity in 2013 to 5% in 2014. China packaging M&A activity has gradually declined over the last few years as economic growth in that country has slowed, causing companies to focus inwardly on managing the slowing growth and reducing the attractiveness of this market, at least for the moment. Emerging market activity has been strong thus far in 2015, driven by strategic acquirers looking to increases market penetration in those areas.

Developed Markets vs. Emerging Markets – M&A Transaction Activity

Sources: Dealogic and William Blair’s analysis.

66%80% 83%

71% 77% 73% 73% 69%83%

34%20% 17%

29% 23% 27% 27% 31%17%

0%

20%

40%

60%

80%

100%

2007 2008 2009 2010 2011 2012 2013 2014 Q1 2015

% Strategic % Financial Sponsor

87% 86% 85% 83% 79% 80% 83% 76% 74% 79% 78% 78% 80% 71%

13% 14% 15% 17% 21% 20% 17% 24% 26% 21% 22% 22% 20% 28%

0%

20%

40%

60%

80%

100%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Q1 2015

Developed Markets Emerging Markets

William Blair

Packaging Investment Banking 10 Current Industry Trends

Emerging Markets Packaging M&A Activity

Brazil 7% 6% 6% 8% 11% 8% 7% 4% 5% 7% 3% 5% 3% 4%

Russia 0% 8% 3% 8% 3% 2% 7% 4% 3% 12% 5% 3% 5% 9%

India 7% 4% 3% 5% 5% 11% 14% 2% 11% 12% 11% 15% 5% 13%

China 24% 16% 16% 30% 24% 27% 30% 48% 33% 28% 35% 33% 22% 13%

Other(1) 62% 65% 72% 50% 57% 52% 42% 42% 52% 57% 54% 43% 64% 61%

Note: Selected countries derived from the Dow Jones list of emerging countries. (1) Other countries include: Argentina, Bulgaria, Chile, Colombia, Czech Republic, Egypt, Estonia, Hungary, Indonesia, Jordan, Lithuania, Malaysia, Mexico, Pakistan, Oman,

Peru, Philippines, Poland, Qatar, Romania, South Africa, Thailand, Turkey, and United Arab Emirates. Sources: Dealogic and William Blair’s analysis.

A few select examples of recent emerging markets M&A activity are profiled below:

Huhtamaki, a producer of rigid paper and packaging products, acquired India-based Positive Packaging Industries, a provider of printed and laminated flexible packaging materials, for $336 million.

Mondi, a South Africa-based producer of paper and packaging products, acquired U.S.-based Graphic Packaging International’s Bags and Kraft Paper Business, for $105 million.

Asahi Group Holdings, a manufacturer of food and beverage products, acquired Malaysia-based Etika International Holdings Dairies and Packaging Business, for $329 million.

Van Genechten Packaging, a manufacturer of packaging products, acquired Russia-based Ost-Print, a provider of packaging and labeling services, for an undisclosed amount.

During calendar year 2014, Australia-based Amcor made three acquisitions totaling more than $100 million. Two of these transactions targeted emerging markets.

– Amcor acquired Zhongshan Tiancai Packaging, a China-based manufacturer of flexible packaging products, for $35 million.

– Amcor also acquired Indonesia-based Bella Prima Packaging, a producer of films and laminated packaging materials, for $25 million.

0%

20%

40%

60%

80%

100%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Q1 2015

Other China India Russia Brazil

William Blair

Packaging Investment Banking Public Packaging Company Valuations 11

Public Packaging Company Valuations

Selected Comparable Public Company Metrics

($ in millions) Stock Price Change Since 3/31/2014

LTM Financials LTM Margins Valuation

Company Revenue EBITDA Gross Profit EBITDA OCF Margin(1) Market Cap.

Enterprise Value

EV/LTM Revenue

EV/LTM EBITDA

Net Debt EBITDA

Flexible Packaging

AEP Industries Inc. 48.4% $1,195.9 $48.0 10.9% 4.0% 2.3% $279.8 $524.4 0.44x 10.9x 4.2x

Amcor Limited 11.2% $8,893.9 $1,242.3 19.3% 14.0% 11.0% $12,863.3 $15,819.8 1.78x 12.7x 2.5x

Bemis Company, Inc. 18.0% $4,343.5 $579.6 19.8% 13.3% 9.1% $4,512.4 $5,812.5 1.34x 10.0x 2.2x

Intertape Polymer Group Inc. 22.8% $784.4 $87.4 18.0% 11.1% 7.1% $871.8 $1,003.5 1.28x 11.5x 1.5x

Sealed Air Corporation 38.6% $7,750.5 $1,049.3 34.7% 13.5% 11.6% $9,574.5 $13,665.9 1.76x 13.0x 3.9x

Mean 27.8% $4,593.6 $601.3 20.5% 11.2% 8.2% $5,620.4 $7,365.2 1.32x 11.6x 2.9x

Median 22.8% $4,343.5 $579.6 19.3% 13.3% 9.1% $4,512.4 $5,812.5 1.34x 11.5x 2.5x

($ in millions)

Stock Price Change Since 3/31/2014



Enterprise Value

EV/LTM Revenue

EV/LTM EBITDA

Net Debt EBITDA

Rigid Packaging

AptarGroup, Inc. (3.9%) $2,597.8 $467.1 32.8% 18.0% 11.7% $3,969.8 $4,411.4 1.70x 9.4x 0.9x

Berry Plastics Group, Inc. 56.3% $5,038.0 $709.0 15.4% 14.1% 10.0% $4,299.5 $8,074.5 1.60x 11.4x 3.9x

MeadWestvaco Corporation 32.5% $5,631.0 $976.0 21.2% 17.3% 11.2% $8,350.3 $11,034.3 1.96x 11.3x 2.6x

RPC Group plc (18.1%) $1,840.2 $241.3 48.3% 13.1% 5.4% $2,152.7 $2,692.2 1.60x 12.2x 2.3x

Silgan Holdings Inc. 17.4% $3,911.8 $523.9 15.3% 13.4% 9.8% $3,674.2 $4,890.9 1.25x 9.3x 2.6x

Sonoco Products Co. 10.8% $5,014.5 $622.2 18.4% 12.4% 9.7% $4,583.3 $5,691.0 1.13x 9.1x 1.8x

Mean 15.8% $4,005.5 $589.9 25.2% 14.7% 9.6% $4,505.0 $6,132.4 1.54x 10.5x 2.4x

Median 14.1% $4,463.2 $573.1 19.8% 13.7% 9.9% $4,134.6 $5,290.9 1.60x 10.4x 2.4x

(1) Operating cash flow (OCF) calculated as EBITDA less capital expenditures. Sources: Capital IQ, FactSet, and William Blair as of March 31, 2015.

William Blair

Packaging Investment Banking 12 Public Packaging Company Valuations

Selected Comparable Public Company Metrics (cont’d)

($ in millions) Stock Price Change Since 3/31/2014



Enterprise Value

EV/LTM Revenue

EV/LTM EBITDA

Net Debt EBITDA

Labels

Avery Dennison Corporation 4.4% $6,330.3 $661.1 26.1% 10.4% 8.1% $4,786.6 $5,692.1 0.90x 8.6x 1.4x

CCL Industries Inc. 31.1% $2,341.3 $436.0 26.8% 18.6% 14.0% $3,872.0 $4,252.6 2.07x 11.1x 0.9x

Multi-Color Corp. 98.1% $798.8 $145.7 21.1% 18.2% 14.5% $1,152.8 $1,592.4 1.99x 10.9x 3.0x

R.R. Donnelley & Sons Company 7.2% $11,675.7 $1,088.1 21.9% 9.3% 7.4% $3,849.5 $6,965.6 0.60x 6.4x 3.1x

Mean 35.2% $5,286.5 $582.7 24.0% 14.2% 11.0% $3,415.2 $4,625.7 1.39x 9.3x 2.1x

Median 19.1% $4,335.8 $548.5 24.0% 14.3% 11.1% $3,860.8 $4,972.3 1.45x 9.8x 2.2x

($ in millions)

Stock Price Change Since 3/31/2014



Enterprise Value

EV/LTM Revenue

EV/LTM EBITDA

Net Debt EBITDA

Paper Packaging

Cascades, Inc. (11.9%) $3,224.5 $297.9 13.9% 9.2% 5.4% $567.9 $2,055.6 0.69x 7.4x 4.7x

Graphic Packaging 43.1% $4,240.5 $694.0 18.6% 16.4% 11.6% $4,755.2 $6,647.9 1.57x 9.6x 2.7x

Greif, Inc. (25.2%) $4,139.9 $444.4 33.6% 13.0% 10.2% $7,720.2 $11,535.6 0.78x 7.3x 3.8x

International Paper Company 20.9% $23,617.0 $3,884.0 21.0% 15.7% 10.7% $10,356.9 $12,023.9 1.39x 9.0x 1.9x

KapStone Paper and Packaging 13.9% $2,300.9 $447.6 18.4% 17.9% 13.5% $3,465.0 $4,759.3 1.67x 9.3x 2.1x

Packaging Corp. of America 11.1% $5,847.0 $1,080.4 14.4% 14.2% 11.4% $5,031.4 $6,696.8 1.68x 9.1x 3.3x

Rock-Tenn Company 22.2% $10,046.7 $1,547.4 17.8% 12.3% 9.8% $6,800.0 $7,625.6 1.13x 7.6x 1.4x

Smurfit Kappa Group plc 15.8% $8,083.0 $1,111.0 31.9% 13.7% 9.5% $1,850.0 $2,074.7 1.17x 8.0x 0.4x

Universal Forest Products Inc. 0.3% $2,739.4 $142.8 39.8% 14.5% 8.8% $9,443.0 $9,615.7 0.45x 9.2x 1.2x

Mean 10.0% $7,137.7 $1,072.2 23.3% 14.1% 10.1% $5,554.4 $7,003.9 1.17x 8.5x 2.4x

Median 13.9% $4,240.5 $694.0 18.6% 14.2% 10.2% $5,031.4 $6,696.8 1.17x 9.0x 2.1x

(1) Operating cash flow (OCF) calculated as EBITDA less capital expenditures. Sources: Capital IQ, FactSet, and William Blair as of March 31, 2015.

William Blair

Packaging Investment Banking Public Packaging Company Valuations 13

Indexed Share Price Performance

The exhibits below illustrate how each group of packaging public companies has performed, on an indexed basis, and relative to the S&P 500, over the last 12 months, 3 years, and 10 years. In the last 12 months, packaging company performance has been positive, with all four of the groups significantly outperforming the S&P 500.

Indexed Stock Performance – Last 12 Months

Indexed Stock Performance – Last Three Years

Indexed Stock Performance – Last 10 Years

Source: FactSet as of March 31, 2015.

80

90

100

110

120

130

140

150

160

03/31/14 05/31/14 07/31/14 09/30/14 11/30/14 01/31/15 03/31/15

S&P 500 (+10.4%) Flexible Packaging (+25.3%) Rigid Packaging (+20.9%)

Labels (+22.3%) Paper Packaging (+40.3%)

(+26.8%)(+22.3%)

(+10.4%)

(+40.3%)

(+25.3%)

(+20.9%)

50

100

150

200

250

300

03/31/12 07/31/12 11/30/12 03/31/13 07/31/13 11/30/13 03/31/14 07/31/14 11/30/14 03/31/15

S&P 500 (+46.8%) Flexible Packaging (+117.0%) Rigid Packaging (+74.0%)Labels (+103.8%) Paper Packaging (+165.1%)

(+46.8%)

(+165.1%)

(+74.0%)

(+103.8%)

(+117.0%)

0

50

100

150

200

250

300

350

03/31/05 03/31/06 03/31/07 03/31/08 03/31/09 03/31/10 03/31/11 03/31/12 03/31/13 03/31/14 03/31/15

S&P 500 (+75.2%) Flexible Packaging (+215.9%) Rigid Packaging (+200.7%)

Labels (+94.2%) Paper Packaging (+174.9%)

(+75.2%)

(+200.7%)

(+174.9%)

(+94.2%)

(+215.9%)

3/31/15

William Blair

Packaging Investment Banking 14 Public Packaging Company Valuations

Historical Trading Values

The following exhibits summarize the median enterprise-value–to–trailing-12-month EBITDA multiples for each group of selected public companies. The data highlights quarterly metrics since 2006. As highlighted below, while the broader market decline in third quarter 2011 depressed valuations to near recession levels, packaging companies have subsequently rebounded strongly and now generally trade above longer-term median levels.

Flexible Packaging

Rigid Packaging

Labels

Paper Packaging

Sources: Capital IQ, FactSet, and William Blair.

8.4x7.4x

7.8x8.6x

7.3x 7.6x 7.3x6.8x

8.0x7.0x

8.0x7.6x 6.4x 6.4x 6.2x 6.3x 6.8x 7.6x

8.1x 8.1x7.8x 7.3x

6.1x

6.8x

9.5x8.8x 7.8x

7.7x

9.2x 9.6x10.7x

10.6x

9.8x10.6x

11.2x12.6x

11.5x

0.0x2.0x4.0x6.0x8.0x

10.0x12.0x14.0x

Median: 7.8x

8.2x7.3x 7.5x 7.9x

8.9x8.3x 7.9x 7.9x 7.0x 7.3x 7.2x

5.8x 5.5x

6.5x 6.8x 7.1x 7.3x6.6x

7.2x 7.4x 7.6x 8.4x7.1x

8.3x 8.2x 7.9x 8.2x 8.3x 8.3x 8.8x 8.9x 9.4x 9.3x9.9x

9.2x9.4x

10.4x

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

14.0xMedian: 7.9x

8.9x8.5x 8.2x 8.6x

9.2x 9.7x 9.5x8.8x 7.9x 7.2x 7.9x 7.2x 6.3x 6.7x 7.5x 7.2x 6.8x 6.8x 7.2x 7.9x 7.2x 7.3x 6.9x 7.5x 7.3x 7.1x 7.4x 7.8x 8.5x 8.8x 8.5x

9.4x 8.7x 9.2x 8.6x9.7x 9.8x

0.0x2.0x4.0x6.0x8.0x

10.0x12.0x14.0x

Median: 7.9x

8.5x 8.1x 8.1x 8.6x 8.5x 8.1x 7.5x 7.2x 7.3x 7.4x 7.9x 7.1x

6.0x 6.3x

6.6x 7.1x 7.1x 6.9x 6.8x 7.1x 7.5x 7.0x 7.1x 7.8x 8.2x7.5x 7.8x

7.4x8.9x 8.8x 8.7x 8.4x 8.1x

8.7x8.0x

8.5x9.0x

0.0x2.0x4.0x6.0x8.0x

10.0x12.0x14.0x

Median: 7.8x

William Blair

Packaging Investment Banking Notes 15

Notes

William Blair

“William Blair” is a trade name for William Blair & Company, L.L.C., William Blair Investment Management, LLC and William Blair International, Ltd. William Blair & Company, L.L.C. and William Blair Investment Management, LLC are each a Delaware company and regulated by the Securities and Exchange Commission. William Blair & Company, L.L.C. is also regulated by The Financial Industry Regulatory Authority and other principal exchanges. William Blair International, Ltd is authorized and regulated by the Financial Conduct Authority (“FCA”) in the United Kingdom. William Blair only offers products and services where it is permitted to do so. Some of these products and services are only offered to persons or institutions situated in the United States and are not offered to persons or institutions outside the United States. This material has been approved for distribution in the United Kingdom by William Blair International, Ltd. Regulated by the Financial Conduct Authority (FCA), and is directed only at, and is only made available to, persons falling within COB 3.5 and 3.6 of the FCA Handbook (being “Eligible Counterparties” and Professional Clients). This Document is not to be distributed or passed on at any “Retail Clients.” No persons other than persons to whom this document is directed should rely on it or its contents or use it as the basis to make an investment decision. William Blair & Company | 222 West Adams Street | Chicago, Illinois 60606 | +1 312 236 1600 | williamblair.com

May 11, 2015

Packaging Investment Banking 16 Disclosures

Disclosures

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