Silgan Holdings Acquires Gateway Plastics For $485 Million

(RTTNews) - Silgan Holdings Inc. (SLGN), a supplier of packaging solutions for consumer goods products, Monday said it has acquired Gateway Plastics for $485 million.

Gateway Plastics manufactures and sells dispensing closures and integrated dispensing packaging solutions, such as a combined container and closure or 100% recyclable dispensing beverage pods, to consumer goods product companies primarily for the food and beverage markets. It operates a large, state-of-the-art manufacturing facility in Mequon, Wisconsin and is projected to generate approximately $150 million in sales and approximately $46 million in adjusted EBITDA for 2021.

"The acquisition of Gateway is the most recent example of Silgan deploying our disciplined capital allocation model to create shareholder value. We are excited to add the Gateway team and business to our global Dispensing and Specialty Closures franchise," said Adam Greenlee, President and CEO.

Silgan expects to realize tax benefits of about $90 million from this acquisition. In addition, Silgan expects to realize annual synergies as a result of this acquisition of approximately $2 million within 12 months primarily through procurement savings.

Silgan funded the purchase price for this acquisition with revolving loan borrowings under its senior secured credit facility. This acquisition is expected to be slightly accretive to the Company's earnings in 2021 with additional accretion expected in 2022.