Steve Katz, Editor04.07.15
In November 2014, UK-based Essentra Packaging acquired the Clondalkin Group’s Specialist Packaging Division (SPD). The $455 million deal opened up the US market to Essentra – the world’s largest health & beauty and pharmaceutical packaging market.
Essentra estimates that the US market for beauty and pharmaceutical packaging will reach $79 billion by 2018, due in part to an aging population that’s educated on health and wellness. The deal brings to Essentra a product range that includes labels, leaflets and folding cartons. In 2014, more than 70% of Clondalkin SPD’s sales were in the pharma, health care and personal care markets; the company totaled approximately $439 million in revenue in 2014.
The acquisition also brings to Essentra 2,400 people in 24 facilities, including nine in North America as well as in the UK, Ireland, Spain, Poland and the Netherlands. David Lennon, Co-CEO of Clondalkin Group, said at the time of the acquisition, “We believe that Essentra will continue to build upon the legacy of excellent service and high quality built by the strong teams in place across our businesses in Europe and North America. We also believe the deep commitment Essentra has demonstrated to pharmaceutical and health care packaging through its extensive network of well invested plants makes it an ideal owner of this business.”
Colin Day, chief executive of Essentra, added, “The acquisition of Clondalkin SPD is a compelling strategic and complementary fit for Essentra, which transforms our existing geographical capabilities to pharmaceutical and healthcare customers who are increasingly seeking a global partner for their packaging requirements. In addition, Clondalkin SPD substantially enhances Essentra’s position in the growing personal care and beauty packaging industry. With an experienced management team and proven track record, this acquisition – being the largest in the company’s history – underscores Essentra’s commitment to building a leading global provider of essential components and solutions in our targeted market categories.”
L&NW’s European correspondent John Penhallow recently caught up with Colin Day, as well as Malcolm Waugh, Essentra’s managing director, to discuss the goals behind the acquisition, and the what we can look forward to seeing from the company in the near future.
Label & Narrow Web: Your company just paid the tidy sum of $455 million for this acquisition. What will be the benefit for Essentra?
Malcolm Waugh: Clondalkin is well established in some markets, including the United States where Essentra had little market penetration. The same goes for some European countries like Spain and Poland. Our goal is to use this acquisition to strengthen our global presence.
L&NW: Because "big is beautiful"?
MW: Not at all. You need to see the patterns and trends in the pharmaceutical packaging market. Our customers are mainly laboratories. They come in all shapes and sizes of course, but there is a phenomenon of concentration by acquisition or merger, especially internationally. Suppliers of packaging and labels on the other hand are mostly small-to-medium sized businesses. What our major clients are asking for is a “one-stop-shop" supplier who can deliver the full range of packaging products around the world.
L&NW: And that’s what you can do right now?
MW: Not yet, there will be more acquisitions in the coming years, but yes, that is our goal. Pharmaceutical and health care packaging and labels now account for 30-40% of our sales, and we are already among the world's top three suppliers. This is in an international market worth over $75 billion and growing at six percent per year according to the latest studies.
L&NW: The acquisition of Clondalkin was a major operation for you. Can we expect rationalizations, site closures?
Colin Day: Clondalkin had a total of 24 production sites, and not all of them will be viable in the new structure. We aim to reduce our annual operating costs by at least € 14 million by 2016, so yes, there will be some rationalization.
L&NW: Last question: how are you placed do battle against the counterfeiters that are the scourge of the pharmaceutical industry?
MW: We bring to bear the entire range of security applications from tamper-evident labels and closures, to holograms, micro text and UV inks to name only a few. But the battle against the counterfeiter is never won.
Essentra estimates that the US market for beauty and pharmaceutical packaging will reach $79 billion by 2018, due in part to an aging population that’s educated on health and wellness. The deal brings to Essentra a product range that includes labels, leaflets and folding cartons. In 2014, more than 70% of Clondalkin SPD’s sales were in the pharma, health care and personal care markets; the company totaled approximately $439 million in revenue in 2014.
The acquisition also brings to Essentra 2,400 people in 24 facilities, including nine in North America as well as in the UK, Ireland, Spain, Poland and the Netherlands. David Lennon, Co-CEO of Clondalkin Group, said at the time of the acquisition, “We believe that Essentra will continue to build upon the legacy of excellent service and high quality built by the strong teams in place across our businesses in Europe and North America. We also believe the deep commitment Essentra has demonstrated to pharmaceutical and health care packaging through its extensive network of well invested plants makes it an ideal owner of this business.”
Colin Day, chief executive of Essentra, added, “The acquisition of Clondalkin SPD is a compelling strategic and complementary fit for Essentra, which transforms our existing geographical capabilities to pharmaceutical and healthcare customers who are increasingly seeking a global partner for their packaging requirements. In addition, Clondalkin SPD substantially enhances Essentra’s position in the growing personal care and beauty packaging industry. With an experienced management team and proven track record, this acquisition – being the largest in the company’s history – underscores Essentra’s commitment to building a leading global provider of essential components and solutions in our targeted market categories.”
L&NW’s European correspondent John Penhallow recently caught up with Colin Day, as well as Malcolm Waugh, Essentra’s managing director, to discuss the goals behind the acquisition, and the what we can look forward to seeing from the company in the near future.
Label & Narrow Web: Your company just paid the tidy sum of $455 million for this acquisition. What will be the benefit for Essentra?
Malcolm Waugh: Clondalkin is well established in some markets, including the United States where Essentra had little market penetration. The same goes for some European countries like Spain and Poland. Our goal is to use this acquisition to strengthen our global presence.
L&NW: Because "big is beautiful"?
MW: Not at all. You need to see the patterns and trends in the pharmaceutical packaging market. Our customers are mainly laboratories. They come in all shapes and sizes of course, but there is a phenomenon of concentration by acquisition or merger, especially internationally. Suppliers of packaging and labels on the other hand are mostly small-to-medium sized businesses. What our major clients are asking for is a “one-stop-shop" supplier who can deliver the full range of packaging products around the world.
L&NW: And that’s what you can do right now?
MW: Not yet, there will be more acquisitions in the coming years, but yes, that is our goal. Pharmaceutical and health care packaging and labels now account for 30-40% of our sales, and we are already among the world's top three suppliers. This is in an international market worth over $75 billion and growing at six percent per year according to the latest studies.
L&NW: The acquisition of Clondalkin was a major operation for you. Can we expect rationalizations, site closures?
Colin Day: Clondalkin had a total of 24 production sites, and not all of them will be viable in the new structure. We aim to reduce our annual operating costs by at least € 14 million by 2016, so yes, there will be some rationalization.
L&NW: Last question: how are you placed do battle against the counterfeiters that are the scourge of the pharmaceutical industry?
MW: We bring to bear the entire range of security applications from tamper-evident labels and closures, to holograms, micro text and UV inks to name only a few. But the battle against the counterfeiter is never won.