NEW YORK (AP) — Packaging company Sealed Air Corp. said Wednesday it has agreed to buy the privately-held Diversey Holdings Inc. for about $2.9 billion in cash and stock, expanding its reach into the chemical cleaning and hygiene industry.
Diversey, based in Sturtevant, Wis., has industrial and retail customers in the food and beverage, health care, lodging and building services businesses in more than 60 countries. It employs more than 10,000 people.
Sealed Air President and CEO William Hickey said the acquisition will take Sealed Air beyond the specialty packaging segment.
Diversey generated $3.1 billion in revenue in 2010. Its products include SmartDose dosing for cleaners, Optifill sealable prescription fulfillment systems, Taski Swingo XP floor cleaning equipment and Oxivir disinfectants.
The companies said that Sealed Air will pay Diversey shareholders $2.1 billion in cash and 31.7 million shares of stock worth $814 million at Tuesday's closing price for Sealed Air.
Sealed Air is based in Elmwood Park, N.J. Including debt, the companies said the deal is worth $4.3 billion.
Sealed Air shares rose 97 cents, or 3.8 percent, to $26.65 in pre-market trading.
The transaction, which will be paid for with available cash and proceeds from committed debt financing from Citi, is expected to be completed in 2011 and add to Sealed Air's earnings in the first full year after the acquisition's closing. It is expected to save Sealed Air about $50 million in the second full year after the buyout's completion.
Diversey President and CEO Edward Lonergan will continue to lead the business after the acquisition, with Hickey remaining as Sealed Air's president and CEO.
Diversey will keep its Americas division and research and development operations in Racine, Wis.
At closing, Diversey shareholders will own about 15 percent of Sealed Air common stock.
Copyright 2011 The Associated Press.