Silgan Holdings Inc (SLGN.N): First Thoughts on Trivium Acquisition - Attractive Multiple, May Unlock Portfolio Value

At first glance, the deal looks attractive as it separates SLGN's higher quality/growth DSC business while strengthening the legacy Metal Containers business with Trivium acquired at an attractive multiple (4.8x LTM EBITDA post-synergies vs. SLGN currently trading 8.7x LTM); the deal could drive 15%+ adj EPS accretion including run-rate synergies. SLGN announced the proposed combination of the company's Metal Containers segment and Food and Beverage Flat Cap Closures businesses with Trivium to create Silgan Metal Containers and Closures (Silgan MCC). The all-cash acquisition values Trivium at $3.4B EV (7.1x LTM adj EBITDA, 4.8x LTM adj EBITDA including $225mm synergies). The transaction also values SLGN's contributed Metal Containers segment and Food and Beverage Flat Cap Closures businesses at $3.8B EV (8.1x LTM adj EBITDA). SLGN will receive ~$2.3B of cash proceeds, which will be used to retire existing debt, and retain 60% ownership of Silgan MCC. American Industrial Partners (AIP)