Packaging is no longer simply a way of wrapping and protecting products: sustainability, personalisation, and creativity are increasingly important, and manufacturing companies often outsource product packaging to specialised companies.
The packaging industry includes plastic, cardboard and paper products, but growing resistance to plastic packaging is driving the development of innovative, sustainable, and reusable materials.
All these changes have the potential to trigger acquisitions activity in the packaging industry.
Companies in the packaging industry deal with most of the same trends, regulations, and legislation as manufacturing companies and must meet the challenges of rising prices for raw materials and shortages of materials and staff.
The clearest trend is demand for alternatives such as biodegradable packaging and films, as consumers become more beware of plastic pollution and its effect on the world’s oceans. Other innovations include replacing plastic parts or printing with better inks.
As well as strict EU regulations regarding compostable packaging, UK companies have been faced with a new Plastic Packaging Tax (PPT) designed to reduce the use of virgin plastic. This can involve time-consuming data collection for importers and manufacturers, or to claim an exemption. And the situation is not straightforward: food and drink products can’t always be wrapped in recycled plastic, demand for recycled material could push prices higher than for taxed material, and it will not always be possible to pass on extra costs to customers.
But given stricter regulation, the willingness of consumers to pay more for green alternatives, and demand from retailers, sustainable packaging is likely to have a significant impact on M&A in the future.
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The need to invest in sustainable materials and processes offers substantial growth opportunities: technological developments, sustainable solutions, and knowledge-sharing create new jobs and make companies in the packaging industry attractive to private equity investors.
Smart packaging is gaining market share, enhancing everyday product packaging with QR codes, smart labels, Radio-frequency identification (RFID) tracking tags, and near field communication (NFC) chips.
Nanotechnology is another area with the potential to revolutionise packaging, especially for food, in terms of materials, tracking and authentication, and sensors to detect deterioration.
There are plenty of good reasons to consider buying or selling a company in the packaging industry. Is your company active in a certain niche where larger players are looking to expand? Or do you want to expand your range of services by acquiring another company?
Perhaps you’re considering a partial or full sale of your packaging company to secure pension income through a pre-exit. We can help you find a suitable buyer.
Smaller businesses still need to manage PPT, even though technical knowledge is often confined to a few key people, so this could be a good time to prepare your company for sale, or to shape your growth ambitions through a packaging business acquisition.
Each year, more than a thousand entrepreneurs in this sector use the Marktlink Multiple to calculate their business value. We regularly guide the transaction process for companies in the packaging sector and have unrivalled market knowledge and a substantial portfolio of potential buyers and sellers.
Are you looking for a partner or an investor, or do you want to join forces with another company? Marktlink can help you realise your ambitions. Always committed, independent and professional, we have a large national and international network, and detailed knowledge of local and global markets.
Our specialists will use their knowledge and experience proactively, to help you find the right successor or implement your growth strategy in the dynamic packaging industry.
Contact us now for more information.