Packaging M&A update: Q4 2019
The global packaging industry is expected to see continued growth in many of its sectors, such as molded fiber packaging, protective packaging, polyethylene terephthalate (PET) packaging, and the pharmaceutical packing market. Growth in many of these sectors can be fueled by increased need for more durable and environmentally friendly alternatives for packaging solutions. This packaging mergers and acquisitions (M&A) update provides Deloitte Corporate Finance LLC insights and market data analysis that shed light on M&A trends in the packaging industry.
- Molded fiber packaging market:1 The market for molded fiber packaging is expected to grow at a compound annual growth rate (CAGR) of 7.2 percent from 2019–2023. Molded fiber, material typically created from recycled paperboard or other natural fibers, is becoming increasingly popular as companies place a higher emphasis on sustainable operating practices. The material is seen by many as an environmentally friendly packaging solution because it is biodegradable and expels no hazardous waste.
- Protective packaging market:2 The protective packaging industry was valued at $25.8 billion in 2019. The industry is expected to grow by an annualized 4.8 percent in the coming years, reaching a value of $34.1 billion by 2025. Protective packaging typically consists of plastic or paperboard material designed to protect goods from atmospheric, magnetic, and electrostatic vibrations and shocks. The industry has benefited from favorable tailwinds, including a growing e-commerce market.
- PET packaging market:3 PET packaging is derived from a polyester to create lightweight, durable, and highly customizable packaging solutions, which are often molded into plastic jugs and boxes. The industry is predicted to grow by an annualized five percent from 2019–2025, increasing the market from an estimated $49.8 billion to $66.4 billion. PET packaging growth is expected to be robust in Europe, where the European Parliament approved legislation that bans single-use plastics in Europe by 2022, creating the need for more durable alternatives.
- Pharmaceutical packaging market:4 The global pharmaceutical packaging market is expected to expand to $118.0 billion by 2025, representing a CAGR of 8.2 percent from 2019–2025. North America is expected to remain the largest pharmaceutical market due to a strong drug producing sector, a growing oral drug delivery market, and improved health awareness. Applications of nanotechnology in the medical industry are also posed to have a sizable impact on pharmaceutical packaging by encouraging next-generation packaging solutions.
This newsletter is a periodic compilation of certain capital markets information. Information contained in this newsletter should not be construed as a recommendation to sell or a recommendation to buy any security. Any reference to or omission of any reference to any company in this newsletter shall not be construed as a recommendation to sell, buy, or take any other action with respect to any security of any such company. We are not soliciting any action with respect to any security or company based on this newsletter. This newsletter is published solely for the general information of clients and friends of Deloitte Corporate Finance LLC. It does not take into account the particular investment objectives, financial situation, or needs of individual recipients. Certain transactions, including those involving early stage companies, give rise to substantial risk and are not suitable for all investors. This newsletter is based on information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such. Prediction of future events is inherently subject to both known risks, uncertainties, and other factors that may cause actual results to vary materially. We are under no obligation to update the information contained in this newsletter. We and our affiliates and related entities, partners, principals, directors, and employees, including persons involved in the preparation or issuance of this newsletter, may from time to time have “long” and “short” positions in, and buy or sell, the securities, or derivatives (including options) thereof, of companies mentioned herein. The companies mentioned in this newsletter may be: (i) investment banking clients of Deloitte Corporate Finance LLC; or (ii) clients of Deloitte Financial Advisory Services LLP and its related entities. The decision to include any company for mention or discussion in this newsletter is wholly unrelated to any audit or other services that Deloitte Corporate Finance LLC may provide or to any audit services or any services that any of its affiliates or related entities may provide to such company. No part of this newsletter may be copied or duplicated in any form by any means, or redistributed without the prior written consent of Deloitte Corporate Finance LLC.
1 MarketWatch, "Molded Fiber Packaging Market size with reach CAGR of 7.24 percent in 2023 | Future Investments in Packaging Sector," October 15, 2019, https://www.marketwatch.com/press-release/molded-fiber-packaging-market-size-will-reach-cagr-of-724-in-2023-future-investments-in-packaging-sector-2019-10-15, accessed January 14, 2020.
2 Mordor Intelligence, "Protective Packaging Market - Growth, Trends, and Forecast (2020-2025)," https://www.mordorintelligence.com/industry-reports/global-protective-packaging-market-industry, accessed January 14, 2020.
3 Mordor Intelligence, "PET Packaging Market - Growth, Trends, and Forecast (2020-2025)," https://www.mordorintelligence.com/industry-reports/pet-packaging-market, accessed January 14, 2020.
4 Mordor Intelligence, “Flexible Packaging Market - Growth, Trends, And Forecast (2019-2024),” https://www.mordorintelligence.com/industry-reports/pharmaceutical-packaging-market-industry, accessed January 14, 2020.