SAZUN BLOG
Juli 14, 2022

Industry Insight Rigid Plastic Packaging

The market for Rigid Plastic Packaging is expected to see a strong growth in the next few years and over the LTM period, input costs of all types have risen resulting in lower M&A activities.“

 

 

Wolfgang Regele
Managing Partner

 

Market Insights
____

Global Market

Global Market for Rigid Plastic Packaging
in billion USD 2021-2026

 

  • The global rigid plastic packaging market size was valued at USD 198.9 billion in 2021 and is expected to grow at a compound annual growth rate (CAGR) of 4.7% from 2021 to 2026. The market is expected to witness significant growth in the future due to its multiple applications in end-use industries such as beverage, food, and healthcare.

 

Rigid Plastic Packaging Market
by material

 

 

 

Rigid Plastic Packaging Market
by end-user

 

Sources: Plastics Ind., Statista, Packaging Assoc., Allied Market Research

M&A Activity Rigid Plastic Packaging

Transactions by buyer type
2016-2022

 

Transactions by package type
in 2021

 

Global Packaging M&A activity levels through the year-to-date have dipped below pre-pandemic levels experienced in 2019 and 2018. The lower deal volumes experienced for the first 5 months of 2022 could be the result of fewer sellers or the activity levels experienced in 2021. Another reason could be the higher input costs of all types.

Sources: Merger Market, Capital IQ, PMCF

Latest Trends in Rigid Packaging

The market in APAC countries is projected to grow at the highest rate from 2021 to 2026. This can be attributed to the growing population in India and China as it presents a huge customer base for FMCG products and consumer durables.

Intermediate bulk containers (IBCs) and clamshells have been identified as the most commonly utilized product types, as they may be utilized for a variety of end-use industry applications. With a forecast market share of 18% in 2022, IBCs control the substantial share of the rigid plastic packaging market.

Increasing pressure on sustainability. Consumers, CPGs, and governments are pushing for sustainable packaging (e.g., corporations’ sustainability commitments, increase in regulations and policies – plastic and single-use bans). This gives potential growth opportunities for manufacturers of rigid plastic packaging over other materials.

Over the LTM period, input costs of all types have risen putting pressure on the profitability of packaging companies. Most notably, resin costs, a packaging company’s large cost category, saw material rises in the LTM, which has led to some companies placing M&A ambitions on pause until calmer periods arrive.

Sources: Packaging Europe (2022), Deloitte (2020), Sazun Research

Valuation Trends and Developments 

EV/SALES(Last 12 Months)

EV/EBITDA(Last 12 Months)


  • The peer group consists of stock-listed companies in the rigid plastic packaging industry. For small and mid-sized businesses 20-30% markdowns in valuations can be expected.
  • EV/SALES multiples have recovered well around the  median of 1.3x after the second hit of the pandemic in Q3 2020. Moreover, Q1 2021 highlights a peak up to 1.55x, which we reason according to the increased value of transactions in the period.
  • EV/EBITDA increased steadily after the second hit of the pandemic in Q3 2020 and is currently trading at above industry average multiples for the past 7 months.

Source: Sazun Equity Research, Rigid Plastics Packaging Peer (2022)

Key Performance Indicators

Source: Sazun Equity Research, Rigid Plastics Packaging Peer (2022)

Selected Deals Rigid Plastic Packaging


Sources: Mergermarket, Sazun Equity Research

Want to know more?
____

 

If you would like to learn more about the valuations and deals of your industry, the transaction mentioned above, or generally our way of working, we would certainly be happy to demonstrate our m&a PLUS® principle in a confidential meeting. Of course, we also offer detailed overviews of the vending machines business, bakeries, and travel platforms, where we have strong credentials.
Just get in touch and we will share our experience on how to grow businesses with long-lasting partnerships.

With passion for M&A,
Your SAZUN Team