Firms & Funds

Olympus Partners pays less than 8x EBITDA for packaging firm after accounting benefit

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  • Sponsor buys Pregis for undisclosed price
  • Deal includes net tax loss carryforward
  • William Blair ran sale process for Pregis, formerly owned by AEA

The headline multiple for the acquisition of the manufacturer of protective packaging came in at about 8.75x EBITDA, according to a source. The transaction also included a net tax loss carryforward, which reduced the purchase price multiple on the deal by nearly 1x.

The purchase price of Pregis and other financial details of the transaction were not released. A spokesman for Olympus Partners declined to comment.

The deal’s purchase price multiple of less than 8x EBITDA places it below the average LBO multiple of 9.07x EBITDA for the first quarter, according to data from S&P Capital IQ LCD.

William Blair & Co ran the sale process for Pregis Corp North America, now a platform investment for Olympus Partners. With a headquarters in Chicago, Pregis Corp North America runs 14 facilities making products aimed at the consumer and industrial market segments. The close of the deal was announced on May 21.

Manu Bettegowda, partner at Olympus, said in a prepared statement that Pregis ”is well positioned for growth” with expanding markets and “solid” channel partnerships. Pregis Corp fits the firm’s investment criteria: businesses with a leading market position and a strong management team led by CEO Kevin Baudhuin and CFO Keith LaVanway, according to Olympus. Baudhuin was promoted in early 2012 after joining the company in 2007 and will continue as CEO.

Back in 2012, Baudhuin replaced Glenn Fischer, a partner at AEA Investors LLC, the company’s principal investor at the time, according to a statement from Pregis. AEA Investors had owned the company since 2005. An executive at AEA declined to comment.

The Pregis deal marks Olympus Partners’ 11th investment from its vintage 2007 Olympus Growth Fund V LP, which raised $1.5 billion in commitments. The firm closed Olympus Growth Fund VI last year with $2.5 billion in commitments, including a recycling option.

Along with Bettegowda, the Olympus team on the deal included David Haddad, Chase Ormond and Mike Boccia. Olympus was advised by Deutsche Bank Securities and Goldman Sachs & Co. Goldman Sachs and Barclays led debt financing for the deal.