Media

Piper Jaffray News Releases

 

News Releases  |  In the News
   Banker Expects Substantial Consolidation in Packaging Industry Over Next
                                Several Years

CHICAGO, March 30 /PRNewswire-FirstCall/ -- Piper Jaffray & Co. today released Mergers and Acquisitions in the Packaging Industry - 2003 Year in Review and 2004 Outlook, a new report written by Doug Lawson, vice president and investment banker in the Piper Jaffray Middle Market Mergers and Acquisitions (M&A) Group. In the report, Lawson provides an overview of the industry, valuations of packaging companies, the level of M&A activity, financial performance metrics, value drivers for target companies and the outlook for M&A activity in 2004.

"We believe M&A activity in the packaging industry presents significant value creation opportunities and that there will be substantial consolidation over the next several years," said Lawson.

In addition to improving economic conditions and more favorable conditions in the financial markets, Lawson believes the following factors will drive M&A activity in the industry:

     -- High fragmentation within the packaging industry
     -- Benefits from economies of scale
     -- Strong customer leverage
     -- Customer service and innovation driving growth and profitability
     -- Existence of substantial purchasing synergies
     -- Access to lower cost capital
     -- The need for acquirers' to achieve profitable growth.

The report also details the following M&A highlights from the packaging industry in 2003:

     -- The number of announced packaging M&A transactions increased slightly
        over 2002 to 311.
     -- The total value of deals increased slightly from 2002, to
        $14.3 billion.
     -- Paper and board and plastic packaging companies accounted for the
        majority of announced transactions.
     -- Strategic acquirers continued to account for the majority of the M&A
        activity.
     -- Valuations for M&A transactions, which typically fall in the range of
        5.0 times to 7.0 times Enterprise Value / earnings before interest,
        taxes, depreciation and amortization (EV/EBITDA), increased slightly
        in 2003 above 2002 levels.

The report is the latest in a series of reports by the Piper Jaffray Middle Market M&A group that explore M&A in the packaging industry. Other recent reports published by Doug Lawson include:

     -- Mergers & Acquisitions Value Drivers for Companies in the Packaging
        Industry (February, 2004)
     -- Packaging Industry Valuation Considerations: Capital Expenditures
        (December, 2003)
     -- Caps and Closures: A Mergers and Acquisitions Review (August, 2003)
     -- Valuations in the Packaging Industry (May, 2003).
     -- Packaging Industry Public Acquirers - Earnings per Share
        Accretion/Dilution Considerations (March, 2003).
     -- Mergers and Acquisitions Activity in the Packaging Industry - 2002
        Year in Review (February, 2003).

    In addition, Piper Jaffray publishes a monthly packaging M&A newsletter.

To subscribe to the newsletter or to request a copy of Mergers and Acquisitions in the Packaging Industry - 2003 Year in Review and 2004 Outlook, or any of the aforementioned reports, please contact Doug Lawson at douglas.j.lawson@pjc.com or 312-920-2139.

Headquartered in Minneapolis, Piper Jaffray & Co., a subsidiary of Piper Jaffray Companies (NYSE: PJC), is a focused securities firm dedicated to delivering superior financial advice, investment products and transaction execution within selected sectors of the financial services marketplace. The company operates through two primary revenue-generating segments -- Capital Markets and Private Client Services. Investment Research, an independent group reporting to the CEO, supports clients of both segments. The firm serves corporations, government and non-profit entities, and institutional investors on a national basis and serves the financial advisory needs of private individuals predominantly across the western half of the United States. The firm has over 2900 employees in 111 offices in 23 states across the country and in London, England. For more information about Piper Jaffray, visit us online at www.piperjaffray.com .

Since 1895. Member SIPC and NYSE.

SOURCE  Piper Jaffray & Co.
03/30/2004
CONTACT:  Dana H. Wade, Public Affairs and Media Relations of Piper
Jaffray & Co., +1-415-277-1556
Web site:  http://www.piperjaffray.com