KBS - Packaging - Market Insight

MARKET INSIGHT – PACKAGING INDUSTRY

M&A ACTIVITY CONTINUES TO RISE WITHIN THE PACKAGING INDUSTRY Packaging industry M&A activity is rising, driven by an amalgamation of sustainability concerns, private equity investment and technological developments. This sector comprises companies involved in the design, production and distribution of packaging materials, machinery and related services. It includes manufacturers of paper, plastic, metal and glass packaging, as well as providers of sustainable and smart packaging solutions, automation equipment and recycling services. The sector serves industries such as food and beverage, pharmaceuticals, e-commerce, wholesale and retail, and manufacturing. The industry is driven by increasing demand for sustainable packaging, regulatory pressures on plastic reduction and the rise of e-commerce and direct-to-consumer (DTC) supply chains. Innovations in biodegradable materials, smart packaging (RFID, QR codes) and automation are shaping the sector’s future. Additionally, investment in circular economy solutions, recycling technologies and lightweight packaging is influencing growth and valuation trends. KBS Corporate’s extensive experience in advising on successful packaging transactions, allied to our ongoing engagement in this dynamic market, has provided us with a unique perspective. We have conducted an in-depth analysis of the company sales landscape within this sector, offering valuable insights into the key trends shaping sales activity. This includes the strategic moves of leading acquirers and the vital role of private equity in driving industry consolidation. We present significant industry transactions, highlighting notable deals and market dynamics that are reshaping the competitive landscape - along with a detailed overview of completed transactions facilitated by KBS Corporate - offering a practical look into real-world M&A examples within the packaging space.

The UK packaging market size is valued at $60.94bn in 2025.

CURRENT LANDSCAPE A notable rise in UK packaging M&A activity is highlighted by a 25% year-on-year increase in deal volumes in 2023. Globally, M&A deals have skyrocketed in the 2020s, and numerous mega-deals in late 2024 suggest a new wave of consolidation, e.g. the mergers of Smurfit Kappa and WestRock, and of Amcor and Berry Global.

2023 DEAL VOLUME

40 35 30 25 20

38

38

32

31

30

27

24

15 10 5 0

Number of deals

2017

2018

2019

2020

2021

2022

2023

SOURCE: Mergermarket, Orbis M&A and Trade Press

International companies have acquired UK firms, strengthening their global and UK presence. Waterland, a Dutch investment firm, is a major player following the acquisition of three UK businesses through its European portfolio companies: Carton Group bought Wrapology, while Asteria Group acquired both Compliance Labelling Solutions and Berkshire Labels. The packaging sector has been consolidating recently, with major players participating in mega-deals. Opportunities are expected to arise in niche areas rather than broader categories. For example, moulded fibre has experienced high growth over the past decade and more expansion is expected through 2030, with room for consolidation.

KEY TRENDS

+ SUSTAINABILITY M&A is driven by sustainability pressures from consumers, companies and governments. Investments are made into firms focusing on environmentally friendly manufacturing materials and technology. Alternative options to plastic are continuously emerging, with paper-based solutions being widely used and ocean-based feedstock technologies entering the market, e.g. Indico Capital Partners led a £2million seed round to invest in FlexSea, a seaweed-based biomaterial start-up. Moreover, many firms are turning to paper-based alternatives. This trend, referred to as paperisation, includes firms substituting plastic with fibre (paper/cardboard) solutions to meet environmental goals. For example, Sealed Air Corporation has announced the introduction of a paper Autobag segment. + E-COMMERCE The surge in online retail over the past five years has had a profound impact on packaging, with recent introductions such as TikTok Shop and Instagram Shop. E-commerce growth is driving demand for shipping packaging and prompting new solutions to improve efficiency. Brands are looking to gain an edge with packaging that enhances the ‘unboxing’ experience for consumers whilst minimising waste. Technology enables more versatile and marketing-friendly packaging without the high costs of traditional printing for small batches. + INNOVATIVE PACKAGING Another emerging trend is the rise of ‘active and intelligent’ packaging which incorporates technology for functionality. This includes QR codes and digital watermarks for consumer engagement, and embedded freshness sensors or RFID tags in packaging for supply chain tracking. Exemplifying how packaging is evolving beyond mere containers, it is now seen as a value-add through tech, design and sustainability features. Sustainability has evolved to become a central industry trend, with companies investing heavily in circular packaging innovations and reporting their progress on recyclability and carbon footprint reduction.

The UK packaging market is expected to reach $68.18bn by 2030.

KEY DRIVERS AND MOTIVATIONS FOR ACQUIRERS

+ PORTFOLIO EXPANSION AND CAPABILITY BUILDING

Trade acquirers are pursuing M&A to broaden their offerings and to stay competitive. These strategic buyers are acquiring in order to fill gaps in their product portfolio or geographic footprint.

Moreover, established packaging firms are motivated by scale and cost synergies. Through M&A, they can achieve greater purchasing power for raw materials, optimise manufacturing footprints and eliminate overheads. The recent wave of mega-mergers in the industry underscores this. Deals such as Smurfit Kappa’s merger with WestRock (forming a transatlantic packaging giant) and Amcor’s $8.4bn acquisition of Berry Global are aimed at creating global leaders with unparalleled scale. + SUSTAINABILITY AND INNOVATION Trade buyers are focusing on acquiring companies that will aid in meeting new market demands, particularly around sustainability and innovation. Firms have shown interest in acquiring start-ups or niche players with proprietary green materials, recycling capabilities or ‘smart packaging’ tech. The UK has seen examples of this, with larger packaging groups investing in firms specialising in environmentally friendly materials and tech, e.g. deals involving bioplastic and compostable packaging start-ups.

Investment into new technologies dominates the market, for example Equity Gap acquired a stake in Interpac, a technology that enables box-makers to self-manufacture cold corrugated boards.

The global packaging market size reached $1.24tn in 2024.

EBITDA MULTIPLE RANGES IN THE PACKAGING SECTOR In the UK and global packaging sector, EBITDA multiples for company sales typically range from 5x to 12x depending on recurring revenue models, technological capabilities and market positioning. Key valuation trends include: • Contract Packaging and Fulfilment Services: Businesses offering outsourced packaging solutions, subscription-based fulfilment and long-term supply contracts typically see 6x-10x multiples, with premium valuations for those with strong client retention and recurring revenue models. • Sustainable & Smart Packaging Manufacturers: Companies producing eco-friendly materials, biodegradable packaging or smart packaging solutions (e.g. RFID-enabled, QR-coded packaging) tend to achieve 7x-12x multiples, especially if they own proprietary technology or have strong supplier agreements. • Recycling & Circular Economy Solutions: Firms specialising in recycled packaging materials, closed-loop solutions and compliance with sustainability regulations trade at 6x-10x multiples, benefiting from increasing ESG requirements and demand for sustainable alternatives. • Packaging Equipment and Automation Providers: Businesses offering advanced machinery, robotics and automated packaging solutions tend to see 5x-9x multiples, with higher valuations for firms with strong IP and industry accreditations. • Advanced Materials and Innovation-Driven Solutions: Companies developing high-performance materials, AI-powered production optimisation and next-generation packaging technologies achieve 8x-12x multiples due to their high-margin, scalable and innovation-driven business models.

FACTORS DRIVING HIGHER VALUATIONS AND EBITDA MULTIPLES Several factors drive valuations in the packaging sector, with a strong emphasis on sustainability, operational efficiency and regulatory compliance. HIGH UTILISATION AND RECURRING REVENUE MODELS Businesses offering contract packaging, subscription-based packaging solutions and long-term supply agreements achieve premium valuations due to stable, predictable cashflows. INVESTMENT IN MODERN AND SCALABLE INFRASTRUCTURE Companies leveraging automation, smart packaging technologies and advanced manufacturing processes see stronger valuations due to increased demand for efficient, cost-effective production. SUSTAINABILITY AND REGULATORY COMPLIANCE Firms with strong ESG credentials, adherence to plastic reduction targets and compliance with evolving packaging regulations command higher valuations due to regulatory trust and risk mitigation. TECHNOLOGICAL INNOVATION AND MATERIAL SCIENCE Companies investing in biodegradable materials, smart packaging (e.g. QR codes, RFID tracking) and AI-driven production optimisation achieve higher multiples due to efficiency and future-proofing. MARKET POSITION AND CUSTOMER BASE Firms with a diverse client base across industries such as food & beverage, pharmaceuticals and e-commerce, as well as strong supplier relationships, attract higher valuations. PRIVATE EQUITY AND CONSOLIDATION TRENDS The sector is experiencing increasing M&A activity, with private equity firms acquiring packaging manufacturers and recyclers to consolidate and scale operations. GEOGRAPHIC EXPANSION AND INFRASTRUCTURE DEMAND Companies which operate in high-growth markets, support the shift towards sustainable packaging, and cater to the rise in e-commerce demand are achieving premium valuations due to long-term growth potential.

WHICH FACTORS DRIVE GROWTH IN THE UK PACKAGING INDUSTRY? TECHNOLOGICAL ADVANCEMENTS Advancements in packaging technology are fostering growth in the packaging industry. This includes improvements in packaging machinery which allow faster, cheaper production, new material innovation and digitalisation. These advancements uncover new possibilities and markets. For example, digital printing enables economical customisation, which encourages brands to undertake more short-run or seasonal promotional packaging. For example, smart packaging features such as QR codes and NFC tags are becoming more common for consumer engagement. UK brands have added these features to create value and a better customer experience.. SUSTAINABILITY Heightened environmental awareness in the UK is reshaping packaging demand, driving growth for sustainable packaging solutions. Consumers and businesses alike are seeking recyclable, biodegradable or reusable packaging, leading to increased use of materials such as paper, glass and compostable bioplastics. This is further reinforced by government regulations and policy. The global sustainable packaging market size was valued at $272.93billion in 2023 and is expected to grow at a CAGR of 7.6% from 2024 to 2030.

Global Sustainable Packaging Market Size, by Material, 2020 - 2030 (USD Billion)

$272.9B

7.6% Global Market CAGR 2024 - 2030

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Source: www.grandviewresearch.com

Plastics

Paper & Paperboard

Metal

Glass

REGULATION The introduction of the Plastic Packaging Tax (PPT) which came into effect in 2022 has added pressure for manufacturers to invest in environmentally friendly packaging. It applies at a rate of £223.69/tonne (2025 tax year rate) on plastic packaging components with less than 30% recycled plastic which are manufactured or imported into the UK. Moreover, in 2023 the Extended Producer Responsibility (ERP) was introduced. It assigns producers responsibility for the end-of-life of products, both financially and operationally. In April 2024, the UK launched the Circularity in Primary Pharmaceutical Packaging Accelerator (CiPPPA) as a way of developing and implementing strategies for the end-of-use recycling of medicinal devices and pharmaceutical packaging, supporting the country’s recyclable packaging solutions. By disincentivising the usage of unsustainable materials, the government has encouraged firms to opt for recyclable plastic and other alternatives. The European Commission is focused on significantly improved capacity for plastic recycling, with a target of 55% of the EU’s total plastic waste recycled by 2025. Many countries are either banning non-recyclable plastic bags or adding a tax.

The Countries Banning Plastic Bags National-level regulation to ban/limit the use of plastic bags (2021)

Full or partial ban Charge/tax Under consideration

* Can also include charges. Some bans not in effect yet. Sources: United Nations, media reports

E-COMMERCE/INTERNET OF PACKAGING (IOP) The rise of online shopping in the UK and worldwide has been a key driver of packaging growth. The UK has one of the most developed e-commerce markets in Europe, and the surge in home deliveries has dramatically increased demand for corrugated shipping boxes, padded mailers and related packaging. The global IoP market size was $21.57bn in 2024 and has grown to $23.66bn in 2025. It is forecast to surpass $54.43bn by 2034 at CAGR of 9.7%. This includes utilising technologies such as QR codes, RFID and NFC to enhance the customer’s experience. Online orders require protective packaging and the impact of e-commerce on categories such as groceries and healthcare has encouraged innovation in this sector, e.g. more custom-sized packaging, frustration-free designs and parcel packaging optimised for courier systems. Moreover, AI-assisted robots now carry out the basic tasks of packaging. This automation is also disrupting the industry.

Top 10 Packaging Industry Trends & Innovations in 2023

Packaging Automation 9%

Digital Printing 10%

Internet of Packaging 32%

Biodegradable Packaging 20%

Active Packaging 8%

Customized Packaging 5%

Editable Packaging 5%

3D Printing 3%

Nano techno logy 3%

Recyclable Packaging 5%

Copyright 2023 StartUs Insights. All right reserved January 2023

This tree map illustrates the top 10 innovation trends & their impact on the Packaging

KEY ACQUIRERS AND INVESTORS Major players in this sector include:

WHAT TYPES OF BUSINESSES ARE STRATEGIC ACQUIRERS PURSUING IN THE PACKAGING SECTOR? Strategic acquirers are particularly focused on businesses operating in high-growth niches of packaging. Rather than broad, already consolidated areas such as metal cans or glass bottles, they are investing into sub-sectors with strong growth trajectories. For instance, flexible packaging including plastic films, pouches and labels has been an area of focus. After a wave of consolidation in flexibles during 2021–2023, investors still see opportunity for further deals given continued demand from e-commerce and consumer brands. Furthermore, private equity and corporate buyers are seeking out packaging companies specialising in recyclable, biodegradable or reusable packaging. Packaging businesses considered environmentally friendly relate to the materials used, for example bio-packaging technologies, recycling tech and services and reusable packaging programs. However, the plastics segment of packaging has experienced major consolidation activity in recent years. In 2024, two blockbuster plastic packaging deals were announced: Amcor’s $8.4bn acquisition of Berry, combining flexible and rigid plastics; and Novolex’s agreement to acquire Pactiv Evergreen for $6.7bn. This deal brought together two food service and consumer plastics packaging giants.

Overall, the plastics segment of the packaging industry has seen a surge in deal volume. For example, October 2024 saw 48 global plastics packaging deals, the highest monthly count since December 2021.

The global packaging market size is projected to hit around $1.69tn by 2034 at

a CAGR of 3.16% (2025 to 2034).

M&A ACTIVITY IN THE PACKAGING SECTOR

Within the last three years, a total of 210 M&A transactions involving UK targets have occurred within the packaging sector.

Around 900 investors and acquirers have registered interest with KBS Corporate for companies in this industry.

The following is a selection of key deals completed:

LAW PRINT AND PACK ACQUIRED BY SCG PACKAGING

KBS DEAL

Stockport-based Law Print was sold to South East Asia’s leading fully integrated packaging manufacturer in a deal overseen by KBS Corporate Finance. SCG is listed on the Stock Exchange of Thailand.

EMBALAJES ECHEBERRIA ACQUIRED BY NEFAB GROUP

In May 2025, global packaging and logistics services provider Nefab, which has a UK division based in Northampton, acquired this Basque packaging provider specialising in heavy-duty corrugated and wood products.

THE PACKAGING COMPANY ACQUIRED BY ANTALIS

KBS DEAL

A provider of bespoke, high-quality packaging solutions from two premises in Leicester, The Packaging Company (Midlands) was sold to Antalis, a global leader in distributing paper, packaging and visual communications solutions.

CHALLENGE PACKAGING ACQUIRED BY LOGSON GROUP

A corrugated cardboard packaging manufacturer and packaging supply chain solutions provider based in East Sussex, Challenge was sold to Logson, an independent group of packaging companies with a turnover of over £400m.

HARRISONS PACKAGING ACQUIRED BY MACFARLANE GROUP

KBS DEAL

Lancashire-based Harrisons became a bolt-on acquisition for Scottish group MacFarlane, which increased its network of more than 30 packaging sites across the UK, Ireland and Scandinavia.

GARRETT HEWITT INTERNATIONAL (GHI) ACQUIRED BY NOVVIA GROUP

GHI, a supplier of plastic and glass containers and other cosmetic packaging products, was acquired by global rigid container and life sciences packaging distributor Novvia in May 2025.

Manchester-based flexible and film packaging specialist Coral Products acquired Arrow Film Converters, an approved supplier to UK supermarkets, through its wholly owned subsidiary Film & Foil Solutions. ARROW FILM CONVERTERS ACQUIRED BY CORAL PRODUCTS

The plastics segment of packaging has experienced major consolidation activity in recent years. In 2024 , two blockbuster plastic packaging deals were announced: Amcor’s $8.4bn acquisition of Berry, combining flexible and rigid plastics; and Novolex’s agreement to acquire Pactiv Evergreen for $6.7bn.

PRIVATE EQUITY ACTIVITY

Leicester-based food packaging business Clifton was sold to Cartonpack, an Italian portfolio company of A&M Capital Europe, which is a private equity firm with over £540m of commitments under management. CLIFTON PACKAGING ACQUIRED BY CARTONPACK GROUP

Legacy, which specialises in oral solid dose packaging, was sold to Nutra-Med, a leading contract packaging provider to the pharmaceutical, OTC, medical device and dietary supplement industries, and a portfolio company of GenNx360 Capital Partners. LEGACY PHARMA SOLUTIONS ACQUIRED BY NUTRA-MED

Garyline, a vertically integrated manufacturer, custom printer and supplier of promotional and speciality packaging products, was able to relocate its facility with significant investment from an affiliate of mid-market private equity firm Mill Point. GARYLINE INVESTMENT RECEIVED FROM MILL POINT CAPITAL

3i sold its investment in Weener Plastics, a leading provider of innovative plastic packaging solutions, to Silgan Holdings for an estimated £283million, representing a 2.2x return on invested capital. 3I GROUP EXIT FROM WEENER PLASTICS

MARKET INSIGHT The UK packaging market size is valued at $60.94bn in 2025, growing at a 2.27% CAGR. It is expected to reach $68.18bn by 2030. The global packaging market size reached $1.24tn in 2024 and is projected to hit around $1.69tn by 2034 at a CAGR of 3.16% (2025 to 2034). In the UK, flexible packaging had the highest market share at 34.7% (41.6 billion units), followed by rigid plastics (32.9%). However, glass packaging is forecast to grow the fastest at a CAGR of 2.3%. The demand for packaging is ultimately derived from end-use markets, and different sectors have different outlooks. Food and beverage remains the largest end-use sector with growth derived from the rise of convenience foods, meal kits and online grocers. Healthcare and pharmaceuticals is another significant sector. As the population ages and medical treatments advance, pharmaceutical packaging such as sterile packaging, blister packs etc is expanding. In the UK, more than 26% of adults take prescription medications, propelling that part of the industry. Moreover, e-commerce and retail trends are contributing to the demand for transit packaging, returnable packaging and branded packaging. Additionally, convenience and changing lifestyles contribute, smaller household sizes and on-the-go consumption increase demand for single-serve and portable packaging.

On the industrial side, packaging for shipping and logistics grows along with manufacturing, reflecting its essential role in the modern economy, delivering products safely while adapting to new preferences and regulations.

In the UK, flexible packaging had the highest market share at 34.7% (41.6 billion units) , followed by rigid plastics (32.9%). However, glass packaging is forecast to grow the fastest at a CAGR of 2.3%.

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