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Sealed Air’s (SEE) Fagerdala Buyout to Boost Asian Presence


Sealed Air Corporation SEE recently announced that it is set to acquire Fagerdala Singapore Pte Ltd. for around $100 million. The acquisition of Fagerdala will considerably expand Sealed Air’s presence in Asia.

Headquartered in Singapore, Fagerdala is a manufacturer and fabricator of polyethylene foam. The company, which has 14 manufacturing facilities, generated $80 million in sales in 2016. Sealed Air will acquire 100% of Fagerdala shares. The deal is expected to close in October 2017.

Notably, Fagerdala’s proficiency in foam manufacturing and fabrication will enable Sealed Air to offer a full portfolio of differentiated solutions, such as automated fulfillment systems and operational excellence consultative services, to consumers.

Sealed Air Corporation Price

Sealed Air Corporation Price | Sealed Air Corporation Quote

Post buyout, Sealed Air is anticipated to witness sales growth in consumer electronics, medical equipment and devices, automotive, temperature assurance, and e-commerce fulfillment sectors, backed by Fagerdala’s extensive reach in these areas. In addition, Fagerdala’s vertically integrated operations in the Asian market will help develop Sealed Air’s business.

Sealed Air recently concluded the acquisition of Deltaplam — manufacturer of flexible packaging in Brazil. This acquisition has fortified Sealed Air’s position in Latin America and expanded its portfolio of consumer unit packaged solutions as well.

Moreover, Sealed Air is likely to benefit from focus on product innovation, acquisitions and growth in e-commerce. However, the company has underperformed the industry it belongs to in the past year, mainly due to escalating raw material costs and lower volumes in Latin America. The stock has dipped 3.9%, while the industry has gained 10.3% during the time frame.

Sealed Air currently carries a Zacks Rank #3 (Hold).

Key Picks

Better-ranked stocks in the industrial product space include Caterpillar Inc. CAT, AGCO Corporation AGCO and Komatsu Ltd. KMTUY. All three stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Caterpillar has expected long-term earnings growth rate of 9.5%.

AGCO has expected long-term earnings growth rate of 13.5%.

Komatsu has expected long-term earnings growth rate of 12.7%.

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