Banks consider sale of Linpac Group

Linpac’s lenders gained control of the food packaging group from private equity firm Montagu last year, in a restructuring that halved the company’s debt.

Now that the financial restructuring has completed, the banking syndicate is looking at how it can get best value for the business and has appointed Bank of America Merrill Lynch as advisor.

In a statement, Linpac said: “Importantly, the mandate given to Bank of America Merrill Lynch emphasizes that the clear objective is value maximisation not urgency and no formal sale process is currently underway.”

“The shareholders have invested additional cash in the business, which demonstrates their belief in its inherent strength, and the business is now capitalised in such a way that the management team has sufficient financial headroom and time, therefore, to maximise value,” the statement continued.

“Under the new ownership Linpac continues to provide customers with a consistently high level of quality and service. Financial performance remains in line with expectations following a satisfactory operational performance in 2009.”

“In conclusion, LINPAC is a company with an enviable customer base, multiple market leading positions, a highly dedicated and committed workforce and a great future.”

Sources close to the company told Packaging News it was too early to know exactly what the outcome would be and the lenders were not in a hurry to make a sale, but that breaking up the business was a possibility.

Linpac consists of four divisions: Linpac Packaging, the Allibert returnable transit packaging business, Ropak in North America and Viscount in Asia-Pacific. It employs some 7,500 staff.

Montagu bought Linpac in June 2003 for £860m. The debt restructuring was completed shortly before Christmas following approval from shareholders and lenders.

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