CD&R’s $10.3bn Acquisition of Sealed Air
- 5 days ago
- 4 min read
By Arthus Marande, Olivia Riera Ripoll, Christopher Putnis, Nehir Yanmaz (ESCP), Ben Motamed, Emmanuel Olowe, Charlie Bark, James Midgley, Archie Clarke (Durham)
Photo: Getty Images (Unsplash)
Overview of the deal
Acquirer: Clayton, Dubilier & Rice (CD&R)
Target: Sealed Air (NYSE: SEE)
Implied Equity Value: $6.2bn
Total Transaction Size: $10.3 billion
Closing Date: Expected mid-2026
Target Advisor: Evercore (financial); Latham & Watkins (legal)
Acquirer Advisor: Bank of America Securities, BNP Paribas, Citi, Goldman Sachs, J.P. Morgan Securities, Lazard, Mizuho, RBC Capital Markets, UBS Investment Bank, Wells Fargo Securities (financial); Kirkland & Ellis, Debevoise & Plimpton (legal)
The objective of CD&R's large-cap leveraged buyout of Sealed Air is to take the globally operating packaging company private in the face of persistent pressure from the public market and operational challenges. The all-cash transaction values Sealed Air at approximately $6.2bn in equity value and implied enterprise value of $10.3bn, representing a premium of roughly 41% to the company’s unaffected share price.
The operations-led private equity methodology of CD&R is reflected in the strategic rationale. Declining protein quantities, rising costs, and competition in protective and e-commerce packaging are some of the difficulties Sealed Air has encountered. Taking Sealed Air private also allows CD&R to pursue scale-driven efficiencies and cost synergies across procurement, manufacturing, and distribution, strengthening the company’s competitive position in the global packaging market. It is anticipated that private ownership will offer more freedom to pursue long-term investments in automation and sustainability, operational efficiency programs, and cost restructuring without being constrained by quarterly results.
The deal will be financed through a leveraged capital structure typical of an LBO, increasing financial risk but enhancing potential equity returns if cash flow generation and margin expansion targets are achieved.
“This transaction provides Sealed Air with the flexibility and long-term capital needed to accelerate its transformation,” -Dustin Semach, CEO of Sealed Air.
Company Details (Acquirer - Clayton, Dubilier & Rice)
Clayton, Dubilier & Rice (CD&R) is a private equity sponsor known for an operations-led value creation approach. The firm invests primarily in North America and Europe and maintains a presence in New York and London. The firm invests across industrial, healthcare, consumer, technology, and financial services sectors.
Founded: 1978
Headquartered: New York City, New York, USA
CEO: Nathan (Nate) K. Sleeper
Number of employees: ~ 51–200
Market Cap: N/A
EV: N/A
LTM Revenue: N/A
LTM EBITDA: N/A
LTM EV/Revenue: N/A
LTM EV/EBITDA: N/A
Recent Transactions: Motor Fuel Group (minority stake sale announced 04/08/2025); Opella (acquisition of a controlling stake 31/03/2025); R1 RCM (take-private, completed 19/11/2024)
Company Details (Target - Sealed Air (NYSE: SEE))
Sealed Air is a global packaging company providing food packaging and protective packaging solutions, including well-known brands such as CRYOVAC and BUBBLE WRAP. The company serves end markets including food, e-commerce/logistics, industrial, and medical/life science. The announced take-private transaction values Sealed Air at approximately $6.2bn equity value and $10.3bn implied enterprise value.
Founded: 1960
Headquartered: Charlotte, North Carolina, USA
CEO: Dustin Semach
Number of employees: 16,400
Market Cap: $6.2 billion USD
EV: $10.3 billion USD
LTM Revenue: $5.33 billion USD
LTM EBITDA: $1.11 billion USD
LTM EV/Revenue: 1.93X
LTM EV/EBITDA: 9.28X
Projections and Assumptions
Short-Term Consequences
Following the expiration of the "go-shop" period on December 16, 2025, Sealed Air’s stock price is effectively pegged to the $42.15 cash offer from CD&R. This all-cash bid represents a 41% premium to the unaffected price, creating a hard valuation floor and eliminating trading volatility until the deal closes in mid-2026.
Operationally, the shift to private ownership under CD&R, removes the pressure of quarterly earnings reporting. This allows leadership to focus solely on profitability and cash generation. With focused investment in automation and sustainability without the public market short term pressure.
Long-Term Upsides
In recent years, Sealed Air has faced a tough operating backdrop, driven by cost-pressured consumers, declining beef production and a loss of market share in the e-commerce space. The take-private acquisition reduces short-term market scrutiny, providing CD&R, experienced within the industrial space, the headroom, flexibility, and longer-term capital to execute their multiyear turnaround plan, including a strategic refocus on its two core segments: Foods and Protective packaging. Through enabling deeper cost restructuring and capital expenditure, this transaction creates a credible pathway to EBITDA margin expansion, building on the 4% increase in EBITDA and 10% growth in EPS reported for Q3 2025. Within the broader industry, consumer pressure is forcing a transition towards recyclable, plastic-free and sustainable packaging solutions. CD&R’s capital and operational expertise will allow Sealed air to capitalise on this long-term secular tailwind.
Risks and Uncertainties
The primary risk for CD&R lies in the aggressive capital structure required for this $10.3 billion deal. With debt-to-equity ratios expected to push leverage past 5.0x, Sealed Air (SEE) faces a CreditWatch Negative outlook from S&P Global. This heavy debt burden coincides with a generational trough in the U.S. beef cycle. Because the core Food segment relies on protein volumes, a multi-year contraction in cattle herds could squeeze the free cash flow needed to service interest payments and fund the company's internal transformation.
Regulatory hurdles also threaten the deal's strategic logic. CD&R’s existing ownership of distributors like Veritiv creates a vertical overlap that will likely draw scrutiny from US and EU antitrust authorities. Beyond the merger closing, there is the risk of shareholder appraisal litigation, as some investors may argue the $42.15 offer undervalues SEE’s recent earnings recovery. These legal complexities could force divestitures or generate unexpected costs that eat into the deal’s projected synergies.
On the operational side, Sealed Air must navigate a difficult pivot towards sustainable materials. New mandates like California’s SB 54 are making legacy products like Bubble Wrap less viable, while e-commerce giants continue to swap plastic dunnage for paper alternatives. Success depends on whether CD&R can stabilise a leadership team that has seen significant turnover since 2023. If management cannot execute this shift amid volatile trade policies and rising input costs, the margin expansion promised to investors may fail to materialise.
“Sealed Air is an exceptional global business with a talented leadership team, leading franchises and attractive underlying fundamentals” - Rob Volpe, Partner at CD&R.
Sources
Sealed Air Investor Relations, Sealed Air to Be Acquired by CD&R for $10.3 Billion, as of 17/11/2025