Packaging Quarterly Review Q4 2022

The final quarter of 2022 closed the year out on the same note as previous quarters, with a continued cooling of market activity. The total number of closed mergers and acquisitions (M&A) transactions dropped by approximately 11% compared to Q3 ‘22. In a similar manner, the total number of packaging transactions completed in Q4 ’22 also dropped, marking a quarter-over-quarter decline of approximately 33%. While the latter half of this year showed a decline in the total number of completed transactions, we continue to see both private and public companies engage sell-side advisors to best position themselves for when uncertain market dynamics subside. Although difficult to predict exactly when that will happen, it is possible we will see a rebound of M&A market activity in the second half of 2023.

While economic uncertainty kept some parties from transacting this quarter, it did not stop others. Both financial and strategic players made notable investments across the flexible, label, rigid and paperboard verticals. Large strategic companies, such as MayrMelnhof (WBAG:MMK), Berlin Packaging (Oak Hill Capital / Canada Pension Plan Investment Board), Novvia Group (Kelso & Co.), Fedrigoni (Bain Capital), TricorBraun (Ares Management / OTPPB), Sonoco Products Company (NYSE:SON) and BEWI (FRA:5T0) all completed acquisitions throughout Q4 ‘22, with Novvia Group, Fedrigoni and TricorBraun completing more than one. Financial sponsors also made several key acquisitions throughout the quarter, with New Water Capital, Wynnchurch Capital, Stirling Square Capital Partners, Dunes Point Capital and Atlas Holdings all adding packaging companies to their portfolios. While the softening of markets had a clear impact on M&A activity, the performance of public packaging companies throughout Q4 ’22 was largely better than that of Q3 ‘22. While the previous quarter saw a broad decline in valuation across all verticals, flexibles represents the only vertical to decline from last quarter (8.4x enterprise value / EBITDA to 8.1x). Label companies, at 10.5x, remained steady compared to the previous quarter. Paperboard saw a slight increase from 6.4x to 6.5x while rigid saw a larger increase from 8.1x to 8.6x. All verticals outperformed the market relative to the S&P 500, a testament to the resilience of packaging as a market.

Despite lingering uncertainty in markets, we are not seeing, nor do we expect a complete halt in M&A activity. A number of factors contribute to our outlook, including private equity hold period expirations, the availability of dry powder that must be spent in the near term and a continuous desire for “must-have assets” even in challenging market conditions. Furthermore, with fewer companies engaging in sell-side processes, we expect the demand for high-quality assets in sale processes to be stronger, driving competitive tensions that ultimately benefit sellers.


  • Despite lingering uncertainty in markets, we are not seeing, nor do we expect a complete halt in M&A activity.

  • Lincoln International experiences exceptional results in 2022 with 9 completed transactions across the packaging sub-sector
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Looking ahead to 2023, Lincoln’s Packaging group expects robust demand for packaging businesses, driven by favorable investor appetite for the sector amidst economic uncertainty; increased opportunity for consolidation; changing local and regional regulatory requirements; emphasis on cross-border activity; and sustainability initiatives across all our packaging sub-sectors.
Luke Webb
Managing Director at Lincoln International


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