In order to take advantage of similar customer bases and expand services provided, Elmwood Park-based Sealed Air announced Wednesday it has acquired Diversey in a transaction valued at $4.3 billion.
The acquisition expands the food packaging company’s line of services into hygiene and cleaning, which Sealed Air said will help customers with increasing food safety regulations.
Diversey, which was sold by Unilever to a subsidiary of the S.C. Johnson family of companies in 2002, generated net sales of $3.1 billion in 2010. The Sturtevant, Wis., company employs 10,000 people and operates in more than 60 countries.
Sealed Air, which employs more than 16,000 people and had net sales of $4.5 billion in 2010, will keep its president and CEO, William V. Hickey, in place, while Diversey President and CEO Edward F. Lonergan will lead the Diversey business unit, which will stay in Wisconsin, and research and development functions.
The transaction, which is expected to be complete by the end of 2011, pending regulatory approval, was comprised of $2.1 billion in cash on hand, and 31.7 million shares of Sealed Air common stock, valued at $25.68 per share as of May 31. Diversey shareholders will own approximately 15 percent of Sealed Air common stock.
“With Diversey, we will expand our footprint beyond specialty packaging solutions by gaining entry into a $40-plus billion chemical cleaning and hygiene industry that has attractive fundamentals and is already in our value chain,” Hickey said, adding he expects shareholders to see “enhanced earnings per share and free cash-flow generation.”
Sealed Air will take advantage of Diversey’s market-leader status in several regions, including Asia-Pacific, Europe and other developing areas. The companies expect $30 million of cost synergies in the first year after the purchase, and $50 million in savings in the second year.