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Chesapeake sold to private equity giant Carlyle Group

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Chesapeake sold to private equity giant Carlyle Group

July 02
11:36 2013

The deal for Chesapeake, which was previously owned by Irving Place Capital and a group of funds managed by Oaktree Capital Management, completed today. No financial details of the deal have been made public.

Chesapeake, which produces cartons, leaflets and labels across nine countries, had turnover of €580m (£493m) in 2012 and primarily serves the pharmaceutical, confectionery and premium drinks markets.

Carlyle has previously invested in packaging businesses and was the owner of French corrugated group Otor prior to its sale to DS Smith in 2010.

The deal comes four years after Oaktree and Irving Place took control of Chesapeake – which was then headquartered in the US – in 2009, moving its headquarters to the UK.

‘Further growth’

Chesapeake chief executive Mike Cheetham said: “We are delighted to have Carlyle working with us as we continue building on the strong reputation we have earned for our high quality products and services.

“Carlyle’s backing will support our aspirations to build upon our strong investments over the past three years as we further grow and develop our business.

“This collaboration will allow us to respond effectively to new business opportunities as we look to further align our business with our customers’ global requirements.”

‘Attractive markets’

Carlyle Europe Partners managing director Eric Kump  described Chesapeake as “a strong business focused on attractive growth markets”.

He said: “The management team has delivered sustained growth and significantly strengthened the company in recent years.

“We look forward to partnering with them to further develop the company’s international footprint and to invest in delivering industry leading products and services.

“We believe the combination of Carlyle’s global presence and network and the strength of the company’s existing footprint and customer relationships will help drive significant growth and new market opportunities in the coming years.”

Today’s sale is the latest in a series of deals that have changed the landscape of UK and European carton manufacture.

Contego Healthcare was sold to Filtrona earlier this year, while Contego Cartons, its sister company, was sold to Graphic Packaging. Benson Group, too, was sold in an MBO in late 2011.

Importance of packaging’

Moorgate Capital advised on the deal and the group’s head of packaging M&A Nicholas Mockett said: “Carlyle’s investment in Chesapeake highlights the increasing importance of packaging in the overall marketing mix and the vital role that packaging plays in highly regulated industries, such as pharmaceuticals, in protecting the consumer.

“Chesapeake is an exceptional platform for growth, with strong management, excellent facilities, and unparalleled footprint.”

“Chesapeake is European number one in pharmaceutical and healthcare packaging and a market leader in cartons for branded FMCG.”

Carlyle was advised on the transaction by Moorgate Capital, Latham & Watkins, Credit Suisse, and KPMG. Financing was provided by Credit Suisse, Goldman Sachs, UBS and Barclays.


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