With the acquisition, Pactiv Evergreen will become privately held, and the combined company will have operations throughout North America. | Retan/Shutterstock
In the latest industry consolidation news, packaging producer Novolex will acquire Pactiv Evergreen for $6.7 billion, with the deal expected to close in mid-2025.
With the acquisition, Pactiv Evergreen, a food and beverage packaging manufacturer, will no longer be publicly traded, according to a press release. Novolex CEO and Chairman Stan Bikulege will lead the combined company.
The acquisition will help expand Novolex’s market coverage across the U.S., Canada and Mexico, and will encompass more than 250 brands, “establishing one of the most diverse substrate sets in the packaging industry, including multiple types of fiber, resin and post-consumer recycled content,” the press release said.
In October, Pactiv Evergreen sold its Arkansas paper mill and North Carolina extrusion facility to Suzano, as part of its move to focus on the plastics converting business.
And during its most recent investor update in mid-November, Pactiv Evergreen said its growth strategy included an increasing presence in “attractive, growing categories,” including consumer packaged goods. In August, the company launched reduced-density PP meat trays, intended to replace oft-banned EPS foam versions.
For the third quarter, Pactiv Evergreen reported a 3% year-over-year drop in net revenues, to $1.333 billion. The foodservice business reported Q3 adjusted earnings before interest, tax, depreciation and amortization of $120 million, higher by almost 3% on the year. The company attributed the increase to higher sales prices, reflecting increased costs for raw materials. However, Q3 net revenue for the segment fell by $5 million to $670 million, with the company citing lower sales volumes amid lackluster demand.
Looking ahead, the company expects to continue to see lower volumes on the year in Q4 in the foodservice category, with small gains in food and beverage merchandising, according to Chief Financial Officer Jonathan Baksht in the Nov. 12 investor call.
The company’s food and beverage merchandising segment reported a decline in Q3 adjusted EBITDA of 15% on the year, to $111 million. Net revenue for the business fell by 6% on the year to $667 million.
In addition to its interests in plastic packaging, Novolex controls about 75% of U.S. paper bag-making capacity, according to a February press release from the Alliance for Responsible Trade in Paper Bags, which represents smaller manufacturers.
In 2022, Novolex announced a $10 million investment to increase PE film recycling capacity at its North Vernon facility in Indiana, and in 2023 it committed to doubling the volume of post-consumer PE films recycled there by the end of 2024. And in July 2023, resin producer NOVA Chemicals announced a plan to build a large plastic film recycling facility in Indiana, in partnership with Novolex.