US-based rigid packaging supplier Silgan has signed a binding agreement for the acquisition of Albéa’s beauty and personal-care dispensing division along with its metal and Brazil operations for $900m.
Tony Allott, Silgan chairman and ceo, describes the pending acquisition as a “hand-in-glove fit” that will bring novel dispensing solutions to its closures portfolio, especially in the area of foam, fine mist and lotion pumps, samples and fragrance caps and closures for the beauty and personal-care markets. Indeed, while Silgan’s closures business is focused on the food, beverage, home care and personal care segments, Albéa Dispensing Systems is specialized in the beauty and skincare sector. “We have engines that dispense product for different markets. Foam pumps are a great example: Albéa is the clear leader in this area in beauty and skincare, so we see a great opportunity to take that technology back to Silgan markets,” notes Silgan’s Allott.
The deal also makes geographic sense for Silgan, giving the group a stronger foothold in China and in Brazil, where Albéa’s industrial capacity is specialized in the production of laminate tubes, mascara, lip gloss and cosmetic caps. Metal component company for the fragrance and cosmetics market Covit, (Covit Europe and Covit America), meanwhile, acquired by Albéa in 2018, is also part of the acquisition.
Albéa’s Dispensing Systems division reported sales of $383m in 2018 and operates 10 industrial sites in North America, South America, Europe and Asia. Combined with the French group’s Metal and Brazil businesses, this portion of its portfolio accounts for about 25% of its sales.
Silgan notes that it will have obtained cost synergies of $20m in light of “administrative cuts, procurement savings and manufacturing efficiencies” within 18 months of the acquisition.
The deal, set to close in the first half of 2020 following regulatory approvals, may not be the only acquisition on the cards. In a conference call today Silgan’s Allott affirmed that the American group sees “continued growth through acquisitions” in the future.
