Publicly traded Veritiv Corporation, a provider of packaging, janitorial and sanitary, and hygiene products, has agreed to be acquired by Clayton, Dubilier & Rice for $2.3 billion.
Veritiv (NYSE: VRTV) operates through three segments; packaging, facility solutions, and print. The packaging segment provides paper-based, rigid, flexible (shrink and stretch films and tapes), cushioning, and engineered packaging as well as glass, metal, and plastic packaging. Within facility solutions, the company’s cleaning, breakroom, and supplies include towels and tissues, personal protective equipment, and cleaning chemicals. Veritiv’s print segment distributes commercial printing, writing, copying, paper, and graphics products. This segment also provides print management, paper procurement, and supply chain management services.
Veritiv was founded in 2013 and is headquartered near Atlanta in Sandy Springs, Georgia, and has 125 distribution centers throughout the United States, Canada, and Mexico.
For the twelve months ending June 30, 2023, Veritiv’s Adjusted EBITDA was $478 million, and its free cash flow (FCF) was $339 million. Based on the $2.3 billion purchase price the Adjusted EBITDA multiple is 4.8x and the FCF multiple is 6.8x.
“This agreement is a pivotal moment in Veritiv’s history,” said Sal Abbate, the chief executive officer of Veritiv. “CD&R’s interest in our company is a testament to our team’s hard work, innovation, and dedication. Fueled by this partnership, we will continue to evolve towards our greatest potential, delivering innovative and sustainable solutions to our customers today – and into the future.”
“Veritiv is a very well-positioned industry leader with differentiated capabilities that deliver value to customers,” said Rob Volpe, a partner at CD&R. “We look forward to supporting Veritiv’s talented leadership team in this next phase of the company’s growth, as they continue to pursue their long-term strategic objectives while maintaining an unwavering commitment to employees, suppliers, and customers.”
“As Veritiv’s largest shareholder, we are supportive of this transaction,” said Greg Ciongoli, a partner at Baupost Group, a Boston-based hedge fund. “The Veritiv management team has successfully executed on its multi-year strategy to drive significant growth and they have built substantial value in the business, which is reflected in the premium paid for the shares. Combined with CD&R’s business-building expertise, we believe Veritiv’s future is very bright.”
New York and London-based CD&R invests in European and United States-based businesses. Since its founding in 1978, the firm has invested more than $40 billion in over 100 companies across a range of industries including industrials, healthcare, business services, consumer, technology and financial services.
Morgan Stanley & Co. was the financial advisor to Veritiv. Guggenheim Securities and Wells Fargo Securities were the lead financial advisors to CD&R.
Committed financing for the buy of Veritiv is being provided by Goldman Sachs, RBC Capital Markets, Wells Fargo Securities, BMO Capital Markets, and UBS Investment Bank.
© 2023 Private Equity Professional | August 10, 2023
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- Source: https://peprofessional.com/blog/2023/08/10/veritiv-acquired-by-cdr/
