US private equity giants ponder bid for Chesapeake, reports suggest

Two giant private equity groups, Blackstone and Carlyle, are among companies believed to be preparing bids for cartons giant Chesapeake, according to media reports.

Two giant private equity groups, Blackstone and Carlyle, are among companies believed to be preparing bids for cartons giant Chesapeake, according to media reports.

The Sunday Times (19 May) reported that Blackstone and Carlyle are regarded as front-runners to acquire Chesapeake for £400m.

However, Private Equity News reported that Platinum Equity – the company that has only recently sold cartons group Contego – has also emerged as a potential acquirer of Chesapeake.

Internationally renowned as a well-known supplier of cartons, labels and leaflets, and specialist plastic packaging, the Buckinghamshire-based Chesapeake has served a variety of big-name manufacturers, including Glaxo Smith Kline, Pfizer, Diageo, Nestlé and Johnson & Johnson.

Chesapeake provided no comment to Packaging News on the matter.

A Platinum Equity spokesman told PN: “We do not discuss whether or not we’re considering potential transactions, and we do not comment on market rumours.”

As PN published this story this morning (04 June), Carlyle and Blackstone had also provided no comment.

An industry insider who wished to remain anonymous told PN that negotiations were going on and “the names bandied about were Carlyle and Blackstone”. Another industry insider commented that he “was not surprised about rumours in the market” because “it was a great time to buy it”.

Industry sources questioned whether Chesapeake’s potential new owners would focus on its plastics division or cartons or both.

Nicholas Mockett of Moorgate Capital told PN: “Chesapeake is regarded as one of Europe’s leading carton companies and also Europe’s leading healthcare packaging company. It was acquired by financial sponsors in 2009 (Irving Place and Oaktree).

“Private equity houses tend to own businesses for three to five years so no one would be hugely surprised if the recent press speculation about new investors came to fruition at some point. It has many parallels with Contego, which was previously owned by private equity and sold in two separate deals recently to Graphic Packaging and Filtrona.