Acquisitions

6 Months Ended

Jun. 30, 2023

Business Combination and Asset Acquisition [Abstract]

LB Holdco, Inc. Acquisition

On February 1, 2023, SEE acquired 100% of the outstanding shares of capital stock of LB Holdco, Inc., the parent company of Liquibox, Inc. (collectively, "Liquibox"), a pioneer, innovator and manufacturer of Bag-in-Box sustainable fluids & liquids packaging and dispensing solutions for fresh food, beverage, consumer goods and industrial end-markets. The acquisition is included in our Food reporting segment. This acquisition accelerates our CRYOVAC® brand Fluids & Liquids business. CRYOVAC® technology, scale and market access provide a significant source of synergies. This acquisition contributes to and

fast tracks SEE’s transformation to become a world-class, digitally-driven company automating sustainable packaging solutions.

Consideration paid was approximately $1.17 billion in cash, subject to customary adjustments. We financed the consideration paid and related fees and expenses through borrowings under our senior secured credit facility, proceeds from the issuance of senior notes, and cash on hand. See Note 13, "Debt and Credit Facilities," for additional details. For the three and six months ended June 30, 2023, acquisition related expenses recognized for the Liquibox acquisition were $0.1 million and $12.0 million, respectively. These expenses are included within Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.

The following table summarizes the consideration transferred to acquire Liquibox and the preliminary allocation of the purchase price among the assets acquired and liabilities assumed. The allocation of purchase price is still preliminary as the Company finalizes the final purchase price adjustment with the seller and finalizes other aspects of the valuation including deferred taxes and intangible valuations. Preliminary estimates will be finalized within one year of the date of acquisition.


	Preliminary Allocation		Measurement Period		Preliminary Allocation
(In millions)	As of February 1, 2023		Adjustments		June 30, 2023
Total consideration transferred	$	1,169.2	$	—	$	1,169.2

Assets acquired:
Cash and cash equivalents	21.2		—		21.2
Trade receivables	48.6		(0.5)		48.1


Inventories	61.6		(0.2)		61.4
Prepaid expenses and other current assets	15.8		(1.0)		14.8
Property and equipment	101.1		—		101.1

Identifiable intangible assets	342.1		(1.5)		340.6

Operating lease right-of-use-assets	15.1		—		15.1
Other non-current assets	9.5		—		9.5
Total assets acquired	$	615.0	$	(3.2)	$	611.8
Liabilities assumed:
Accounts payable	27.0		(1.4)		25.6
Current portion of long-term debt	0.1		—		0.1
Current portion of operating lease liabilities	3.7		—		3.7


Other current liabilities	28.4		2.4		30.8
Long-term debt, less current portion	5.1		—		5.1
Long-term operating lease liabilities, less current portion	11.4		—		11.4
Deferred taxes	92.2		—		92.2
Other non-current liabilities	6.6		(2.7)		3.9
Total liabilities assumed	$	174.5	$	(1.7)	$	172.8
Net assets acquired	440.5		(1.5)		439.0
Goodwill	$	728.7	$	1.5	$	730.2

The following table summarizes the identifiable intangible assets and their useful lives.


	Amount		Useful life
	(In millions)		(In years)
Customer relationships	$	180.7	11.0
Trademarks and tradenames	26.0		10.0
Software	3.7		2.0
Technology	130.2		12.0
Total intangible assets with definite lives	$	340.6

Goodwill is a result of the expected synergies that are expected to originate from the combination of Cryovac and Liquibox solutions for the Company, as well as growth of our sustainable packaging portfolio. Goodwill is not deductible for tax purposes. The goodwill balance associated with Liquibox is included in the Food reportable segment.

Liquibox Supplemental Information

The following table presents the amounts of net sales and net earnings (loss) attributed to Liquibox since the acquisition date that are included in our Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2023:


(In millions)	Three Months Ended June 30, 2023		February 1, 2023 through June 30, 2023
Net sales	$	75.3	$	132.6
Net earnings (loss)	$	1.1	$	(4.3)

Pro Forma Financial Information

The following table presents the Company’s unaudited pro forma financial information for the three and six months ended June 30, 2023 and 2022, assuming the acquisition of Liquibox had occurred on January 1, 2022. The information below reflects pro forma adjustments based on available information and certain assumptions that SEE believes are factual and supportable. The unaudited pro forma information is not necessarily indicative of the results that might have occurred had the transaction actually taken place on January 1, 2022 and is not intended to be a projection of future results and gives no effect to any future synergistic benefits that may result from the combination or the costs of integrating the acquired operations with those of the Company.


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2023		2022		2023		2022
Net sales	$	1,380.8	$	1,512.1	$	2,755.2	$	3,016.4
Net earnings	$	100.9	$	81.7	$	170.9	$	195.4

The unaudited pro forma financial information includes, where applicable, adjustments for (i) additional expense from the fair value step-up of inventory, (ii) additional amortization expense related to acquired intangible assets, (iii) additional depreciation expense related to acquired property and equipment, (iv) transaction costs and other one-time non-recurring costs, (v) additional interest expense for borrowings related to the acquisition and amortization associated with fair value adjustments of debt assumed, and (vi) associated tax-related impacts of adjustments.

Acquisition of Foxpak Flexibles Ltd.

On February 2, 2022, SEE acquired Foxpak Flexibles Ltd. (“Foxpak”), a privately-owned Irish packaging solutions company. Foxpak is a digital printing pioneer that partners with brands to deliver highly decorated packaging solutions; stand-up and spout pouches, and sachets that serve a variety of markets including food retail, pet food, seafood, and snacks. This transaction resulted in a purchase price paid of $9.7 million, including the final purchase price adjustments that were recorded in the second and fourth quarters of 2022. The Company allocated the consideration transferred to the fair value of assets acquired and liabilities assumed, resulting in an allocation to goodwill of $5.2 million and an allocation to identifiable intangible assets of $2.7 million. The acquisition is included in our Food reporting segment. Goodwill is not deductible for tax purposes. A deferred tax liability of $0.3 million on identifiable intangible assets was recorded on the opening balance sheet. The Foxpak acquisition was not material to our Condensed Consolidated Financial Statements.

Other 2023 Acquisition Activity

During the second quarter of 2023, Food had other acquisition activity resulting in a total purchase price paid of $15.1 million. The Company allocated the consideration transferred to the fair value of assets acquired, resulting in an allocation to goodwill of $8.0 million. There were no other identifiable intangible assets acquired. This acquisition activity is expected to supplement our developmental efforts for sustainable packaging and accelerate our speed to market for certain sustainable solutions. This acquisition activity was not material to our Condensed Consolidated Financial Statements.