Austrian MM Group Signs Agreement to Sell 70% Stake in Packaging Business

en.Wedoany.com Reported - On November 9, Austrian packaging and cartonboard manufacturer MM Group (Mayr-Melnhof Karton AG) signed a binding transaction agreement with U.S. private equity firm KPS Capital Partners to transfer its packaging business to a newly established holding company. Upon completion of the transaction, KPS will hold a 70% stake and MM Group will retain 30%, with an enterprise value of EUR 2.4 billion for the target business as a whole. The transaction is expected to close in the first half of 2027.

The transaction covers MM Group's food and premium packaging business, as well as its pharmaceutical and healthcare packaging business, with the food and premium packaging business excluding related operating assets in Iran and Tunisia. The packaging business will operate independently through the newly established holding company and will continue to use the MM Packaging name. The business covers products such as folding cartons, labels and leaflets, with more than 50 production sites in 19 countries worldwide and approximately 8,500 employees.

Based on the transaction valuation, the enterprise value of EUR 2.4 billion for the packaging business corresponds to approximately 9 times its expected adjusted EBITDA for 2026. After deducting approximately EUR 400 million that MM Group expects to invest to retain a 30% stake in the new holding company, the Group expects to receive cash proceeds of EUR 1.8 billion to EUR 1.9 billion upon completion of the transaction. The final amount will be determined based on transaction taxes and fees, purchase price adjustments and closing timing.

The agreement also includes an equity adjustment clause linked to operating performance in fiscal year 2027. If the packaging business fails to meet the agreed EBITDA target, MM Group's stake in the new holding company may be reduced from 30% to a minimum of 20%, with no additional consideration payable by either party in connection with such adjustment. Following completion of the transaction, MM Group will account for its retained equity interest in the packaging business using the equity method.

MM Group plans to focus its business on the cartonboard and paper segment after completion of the transaction, while continuing to supply raw materials to the independently operated packaging company through a long-term cartonboard supply agreement. Following the signing of the transaction, both business segments will maintain normal operations, and the packaging business will continue to belong to MM Group until closing.

MM Group expects its net cash position to reach approximately EUR 800 million to EUR 900 million after completion of the transaction. The Group plans to use the proceeds to repay debt, make strategic investments, and, subject to necessary corporate approvals, legal and regulatory requirements and then-current operating conditions, make a special distribution of EUR 500 million to EUR 600 million to shareholders. The Supervisory Board of MM Group has approved the transaction. Closing remains subject to relevant corporate and regulatory approvals, and the French business portion is also subject to completion of employee representative consultation procedures.