Wendel has entered into an agreement to sell Constantia Flexibles, a prominent player in the global flexible packaging market, to an affiliate of One Rock Capital Partners. Constantia Flexibles is renowned for providing flexible packaging solutions to a diverse range of esteemed clients, including both multinational corporations and successful local businesses in the consumer and pharmaceutical sectors.

The sale is set to yield net proceeds of approximately €1,097 million for Wendel, representing a significant multiple of 1.94 times their total investment in Constantia Flexibles since 2015.

The transaction’s net proceeds amount to €84 million more than the valuation of Constantia Flexibles in Wendel’s net asset value (NAV) published prior to the transaction announcement, specifically as of March 31, 2023. Additionally, there is a possibility of generating further proceeds from the ongoing disposal of assets by the Company, which could increase the total proceeds to €1,124 million. This valuation represents an 11.0% increase over the NAV on 31 March 2023 and a 6.8% increase over the NAV on 30 June 2023.

The completion of the transaction is expected to occur in the second half of 2023, subject to fulfilling contractual conditions precedents, including obtaining regulatory authorities’ clearance.

David Darmon, Wendel Group’s Deputy CEO, said, “The history of Constantia Flexibles within Wendel’s portfolio highlights the validity of our long-term investor model, which has enabled us to support the Company in its development. Constantia Flexibles has thus placed innovation at the heart of its growth model, enabling it to rise to the challenge of the circular economy without compromising on the functional requirements of its products. Under Pim Vervaat’s leadership, all Constantia Flexibles teams demonstrated their commitment and resilience during the Covid-19 crisis and coped brilliantly with the recent disruptions in the energy and commodities markets. They enabled the Company to deliver outstanding operational, financial and extra-financial performance.”

Pim Vervaat, CEO of Constantia Flexibles, adds, “Our current position and success would not have been possible without Wendel’s dedication and commitment. We are grateful for their supportive partnership over the years, which has enabled our growth and investments in our workforce, innovations, and sustainable offerings for the Consumer and Pharma markets. Working alongside Wendel has been a pleasure.”

On 27 March 2015, Wendel completed the acquisition of Constantia Flexibles for an enterprise value of €2.3 billion. In this acquisition, Wendel invested €640 million in equity, obtaining a 73% stake in the Company. The remaining 27% stake was held by the AREPO Foundation, which invested €240 million.

Later, on 22 September 2015, Wendel entered into an agreement with Maxburg Capital Partners (MCP), an investment company supported by the RAG Foundation, to syndicate a minority share of its investment in Constantia Flexibles. Consequently, in November 2015, MCP purchased approximately 11% of the capital of Constantia Flexibles from Wendel for €101 million.

After the MCP transaction, Wendel, the AREPO Foundation, and MCP participated in a €50 million capital increase for Constantia Flexibles. Each entity subscribed to a pro-rata stake in the capital increase, enabling the financing of the acquisitions of Afripack and Pemara. As a result, Wendel’s total equity investment in Constantia Flexibles amounted to €565 million.

Currently, Wendel holds a controlling 60.8% share of the capital in Constantia Flexibles, solidifying its position as the Company’s controlling shareholder.

History of Wendel’s investment in Constantia Flexibles

In 2017, Constantia Flexibles made a strategic decision to sell its labels business to Multi-Color Corporation. This value-creating transaction provided the company with additional resources and capital to further strengthen its growth strategy in the flexible packaging market. Constantia Flexibles already held a leading position in various segments, including confectionery foils, die-cut lidding, alu-container systems, and pharmaceutical foil.

During its ownership period, Wendel actively supported Constantia Flexibles in pursuing an external growth strategy. The company successfully completed 11 acquisitions across 10 different countries, further enhancing its market presence and expanding its global reach in the flexible packaging industry.

ESG achievements since 2015

For more than 8 years, Wendel has supported Constantia Flexibles in its ESG challenges, and more specifically in the issues of the circular economy and the fight against climate change. As a result, since 2018 the Austrian group has had a greenhouse gas emissions reduction trajectory approved by the SBTi. 85% of its products are designed for recycling or have a recyclable alternative. Occupational safety has always been an absolute priority for Wendel, and special attention has been paid to this issue, resulting in continuous improvement, with the accident frequency rate falling from 13.4 in 2014 to 2.2 in 2022.

The relevance of the in-depth work carried out by Wendel and Constantia is reflected in the Group’s excellent extra-financial ratings, with an A- rating from the CDP and the Ecovadis Gold medal, ranking Constantia among the top 2% of companies in its sector.