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Campbell Soup, Crown Holdings top Philadelphia's 2017 M&A list with December acquisitions

Harold Brubaker, Staff Writer

Updated: Friday, December 29, 2017, 5:53 AM

Campbell Soup Co.’s planned acquisition of Snyder’s-Lance Inc. for a total value of $6 billion, including debt, is this year’s largest deal by a Philadelphia-area company, according to data from Bloomberg L.P.

Philadelphia-area companies stepped up their acquisition game in 2017, announcing 11 deals worth at least $500 million, compared with just two such deals last year.

Leading the pack was Campbell Soup Co., whose Dec. 18 agreement to acquire snack maker Snyder’s-Lance Inc. for a total value of $6 billion was the largest this year by a Philadelphia-area company, according to Bloomberg LP data.

The region’s second-biggest was aluminum- and metal-can maker Crown Holdings Inc.’s $3.91 billion deal to buy Signode Industrial Group Holdings, a firm that makes steel and plastic strapping, as well as other products used in shipping.

Also notable were two deals by Aramark Corp. worth at least $1 billion.

The stirrings by old-line area companies — the Aramark and Campbell deals were the biggest in their histories — occurred during a second consecutive down year for U.S. mergers-and-acquisitions activity.

“However, despite being slow out of the gate, and the expected contraction continuing from 2015’s record year, in 2017 the U.S. market will end with a fourth consecutive year of more than $1 trillion in value,” Bryan Adams, director of FactSet M&A, wrote in a recent assessment of this year’s mergers-and-acquisitions activity.

FactSet Research Systems Inc., a Norwalk, Conn., company that sells data and analytics to investors, valued this year’s transactions at $1.3 trillion, down from $1.44 trillion last year and $1.46 trillion in 2015.

Adams said U.S. M&A cycles usually run cycles that last between two and three years. “We had 25 months of growth ending in May 2016, and we are only 16 months into contraction,” he noted.

Last year’s biggest acquisitions by local companies were Comcast Corp.’s $3.8 billion purchase of the California movie studio DreamWorks Animation LLC and Teleflex Inc.’s $962.6 million purchase of Vascular Solutions Inc., a Minneapolis medical-device manufacturer.

A common thread in the deals by Aramark, Campbell and Crown was a move into adjacent markets.

Aramark’s $1.35 billion acquisition of Avendra LLC, which manages $5 billion in purchasing for major hotel chains, moves the Philadelphia provider of food, uniform, and other services further into something it already does for itself: buying all sorts of supplies for its customers. Aramark completed that acquisition Dec. 11. Its second deal, the $1 billion purchase of a complementary uniform-services company, Ameripride Services Inc., is still pending.

Camden-based Campbell Soup has long had a presence in snacks, particularly with its popular Goldfish crackers, but the purchase of Snyder’s-Lance, of Charlotte, N.C., will plunge Campbell into a far deeper world of snacks, including pretzels, potato chips, and sandwich crackers. Campbell completed its $700 million acquisition of organic-broth maker Pacific Foods on Dec. 12.

Crown chief executive Timothy J. Donahue acknowledged in a conference call with analysts that Signode Industrial Group Holdings, of Glenview, Ill., makes a different kind of packaging than Crown does, but he asserted that Signode’s business is still packaging. In addition to strapping, Signode makes edge protectors and other products to prevent damage to goods in transit, as well as the tools and equipment needed to use its products.

Unlike the Campbell/Snyder’s-Lance deal, for which cost-cutting and the achievement of greater efficiency in the operation of Snyder’s-Lance is front and center, Crown’s pending purchase of Signode does not feature cost-cutting as a key goal.

“We didn’t announce any synergies because we believe the financial output of the combination stands on its own,” Donahue said.

Signode, which it is buying from private-equity giant Carlyle Group LP, is supposed to be a new growth platform for Crown, which already has 146 factories in 36 countries and typically adds two beverage-can factories a year, he said. Including Signode, Crown is expected to have $11 billion in annual revenue.

The Philadelphia region, defined as Bucks, Chester, Delaware, Montgomery, and Philadelphia Counties in Pennsylvania and Burlington, Camden, and Gloucester Counties in New Jersey, also saw some large sales in 2017.

The biggest of those was the sale of VWR Corp., a Radnor distributor of laboratory supplies, to Avantor Performance Materials Inc. of Center Valley, Lehigh County, for $6.3 billion.

Harold Brubaker, Staff Writer

Read full story: Campbell Soup, Crown Holdings top Philadelphia's 2017 M&A list with December acquisitions

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