Www.blaige.com Presentation to: Global Packaging Consolidation: Lead, Follow, or Get Out of the Way September 27, 2011 Las Vegas, Nevada

www.blaige.com

Presentation to:

Global Packaging Consolidation: Lead, Follow, or Get Out of the WayLead, Follow, or Get Out of the Way

September 27, 2011 Las Vegas, Nevada

Page 2

Over the past decade how many of the top 50 companies in Over the past decade how many of the top 50 companies in each of the major packaging segments have been eliminated or each of the major packaging segments have been eliminated or have had a change in ownership?have had a change in ownership?

a.a.5%5%

b.b.10%10%

c.c.50%+50%+

Answer: C On average, 56% of the top 50 companies since 2001 have been eliminated or changed ownership.

© Copyright 2011, All Contents Thomas Blaige & Co. LLC

Page 3Objectives for You – How to “Win”Objectives for You – How to “Win”

DDeeper Understandingeeper Understanding– Of risks, opportunities, and your – Of risks, opportunities, and your situationsituation

Develop a Plan/StrategyDevelop a Plan/Strategy– Lead, Follow, or Get Out of the – Lead, Follow, or Get Out of the WayWay

Survive and ThriveSurvive and Thrive– There are winners and losers in every – There are winners and losers in every dealdeal

Today’s presentationToday’s presentation-- To assist each participant on a personal, -- To assist each participant on a personal, professional and corporate level to maximize potential in an professional and corporate level to maximize potential in an increasingly challenging business environment.increasingly challenging business environment.


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Blaige & Company’s Pure Focus has resulted in its position as the largest specialty investment bank of its kind.

Our advantage is rooted in two unique and significant capabilities: Strategic and operational approach (rather than

financial/transactional) Plastics, packaging, and chemicals only.

Pure Focus. Premier Value.SM

Blaige & Company’s senior advisory professionals have personally managed, owned, or visited over 600 plastic, packaging, and chemical operations in 40 countries and have completed over 150 value-enhancing transactions in plastics, packaging, and chemicals.

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has acquired the pharmaceuticalfolding carton division of

Exclusive representation of H.S. Crocker Co., Inc.

by Blaige& Company L.L.C.

has acquired

Exclusive representation of P & O Packaging, Ltd.

by Blaige& Company L.L.C.

P & O Packaging, Ltd.a portfolio company of PinecrestCapital Inc.


Blaige & Company Blaige & Company Global Operating Experience, Exclusive Focus, Unmatched ResultsGlobal Operating Experience, Exclusive Focus, Unmatched Results

Page 6AAGENDAGENDA

SectionSection

Major Themes Reflected in Packaging M&A in 2011Major Themes Reflected in Packaging M&A in 2011II

Packaging Industry Global ConsolidationPackaging Industry Global Consolidation IIII

M&A Activity in the Global Packaging MarketsM&A Activity in the Global Packaging Markets IIIIII

Packaging Segment Consolidation AnalysisPackaging Segment Consolidation Analysis IVIV

The Art of the Deal: Maximizing Value in M&AThe Art of the Deal: Maximizing Value in M&A VV

TransactionsTransactions

SummarySummary VIVI

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Major Themes Reflected in Major Themes Reflected in Packaging M&A in 2011Packaging M&A in 2011


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Major Themes Reflected in Packaging M&A in 2011Major Themes Reflected in Packaging M&A in 2011

ConsolidationConsolidation – Transforming Competitive – Transforming Competitive Landscape at All Levels Landscape at All Levels

Regulated MarketsRegulated Markets – Driving Premium Valuations – Driving Premium Valuations

Global Supply ChainGlobal Supply Chain – Consolidation of Vendors – Consolidation of Vendors

Institutional PracticesInstitutional Practices – Required for Funding / – Required for Funding / Growth at All Levels (Including Mid Market)Growth at All Levels (Including Mid Market)

Blaige Ten Year Consolidation StudyBlaige Ten Year Consolidation Study – –Segmentation: “Leaders, Followers, Others”Segmentation: “Leaders, Followers, Others”


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Packaging Industry Packaging Industry Global ConsolidationGlobal Consolidation


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Packaging Industry Global ConsolidationPackaging Industry Global ConsolidationThe “Leaders,” “Followers,” and “Others”The “Leaders,” “Followers,” and “Others”

Top Consolidators (“Leaders”)

Static Participants(“Others”)

Consolidatees(“Followers”)

• 10-20% of universe• Rapidly gaining

share• Aggressive

acquisitions and divestitures

• Market domination via best acquisitions, selective divestitures

• 60-80% of universe• Share erosion• Mergers and selective

acquisitions• Pursue niche

leadership

• 10-20% of universe• Rapidly losing share• Restructuring and

divestitures • Sell at maximum

Price


Packaging Industry Global Consolidation

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Packaging Industry Global ConsolidationPackaging Industry Global ConsolidationEvolution across packaging types show that Flexible Packaging is due for Significant Consolidation

SegmentSegment 19801980 20112011

Glass BottlesGlass Bottles 19 competitors19 competitors 3 Leaders: 90% 3 Leaders: 90% share share (Anchor, Owens, (Anchor, Owens, St. Gobain)St. Gobain)

Food CansFood Cans 25 competitors25 competitors 3 Leaders: 80% 3 Leaders: 80% shareshare(Ball, Crown, Silgan)(Ball, Crown, Silgan)

Beverage CansBeverage Cans 14 competitors14 competitors 3 Leaders: 80% 3 Leaders: 80% share share (Ball, Crown, (Ball, Crown, Rexam)Rexam)

Flexible Flexible (Plastic) (Plastic) PackagingPackaging

Many Many competitorscompetitors

4 Leaders: 34% 4 Leaders: 34% share share (Amcor, Bemis, (Amcor, Bemis, Printpack, Sealed Air)Printpack, Sealed Air)


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Summary—Over 50% of Top 50 Players have Summary—Over 50% of Top 50 Players have Sold / Merged in Past DecadeSold / Merged in Past DecadeSample Below (Averages):Sample Below (Averages): 43% Eliminated; 13% Changed Ownership; 56% 43% Eliminated; 13% Changed Ownership; 56%

Merged/Sold.Merged/Sold. An Additional 20% Have Used M&A as a Strategy.An Additional 20% Have Used M&A as a Strategy.


Consolidation of 2001's Top 50 Companies

Sector EliminatedChanged

OwnershipTotal

Flexible Packaging

Film & Sheet Top 50 40% 14% 54%

Label Converters Top 50 36% 16% 52%

Rigid Packaging

Blow Molder Top 50 52% 10% 62%

Thermoforming Top 50 44% 12% 56%

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M&A Activity in the Global M&A Activity in the Global Packaging MarketsPackaging Markets


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Plastic Packaging Fiber Packaging Metal and Glass Packaging

48 Transaction

s 3% of Packaging

transactions

442 Transactions

28% of Packaging transaction

1099 Transactions

69% of Packaging

transactions

M&A Activity in the Global Packaging Markets 2002-M&A Activity in the Global Packaging Markets 2002-2010 2010 1,589 Packaging Transactions Analyzed by Blaige & Company1,589 Packaging Transactions Analyzed by Blaige & Company


Glass 33%Metal 67%

Corrugated24%

Integrated / Paper Making

14%

Diversified17%

Label22%

Folding Carton23%

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2002-2010: plastic packaging deals more than tripled from 50 to 159 (average 122).• 2002-2005: majority flexible packaging deals. • 2006-2009: majority rigid packaging deals.• 2010: deals were evenly split between flexible and rigid.

Global Plastic Packaging M&A ActivityGlobal Plastic Packaging M&A Activity

Source: Blaige & Co.

M&A Activity in the Global Packaging Markets M&A Activity in the Global Packaging Markets Plastic Packaging Accounts for nearly Plastic Packaging Accounts for nearly 30%30% of All Plastics Deals of All Plastics Deals


Average = 113

3166 74 74 66 53 43

63 7919

59 41 52 72 87

60

8080

0

30

60

90

120

150

180

2002 2003 2004 2005 2006 2007 2008 2009 2010Rigid Flexible

50

125115

126138 140

103

143159

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M&A Activity in the Global Packaging Markets 2002-M&A Activity in the Global Packaging Markets 2002-201020101,589 Packaging Transactions Analyzed by Blaige & Company1,589 Packaging Transactions Analyzed by Blaige & Company

Source: Blaige & Co. Proprietary Research


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M&A Activity in the Global Packaging Markets M&A Activity in the Global Packaging Markets Global Packaging Geography Profile: Growth in International and Cross-Border Global Packaging Geography Profile: Growth in International and Cross-Border TransactionsTransactions

159 Transactions

2010 Geography2003 Geography

125 Transactions

International / International

52% International / International

58%

International / US13% Internation

al / US18%

US Only24%

US Only35%


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2010 Buyers2003 Buyers

M&A Activity in the Global Packaging Markets M&A Activity in the Global Packaging Markets Plastic Packaging: Strategic and Add-On Acquisitions -- 84% of Deal ActivityPlastic Packaging: Strategic and Add-On Acquisitions -- 84% of Deal Activity

125 Transactions 159 Transactions

Financial Platform

16%

Financial Add-On

18%

Strategic Buyers

66%

Financial Platform

22%

Financial Add-On

14%

Strategic Buyers

64%


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Packaging Segment Packaging Segment Consolidation AnalysisConsolidation Analysis


Page 20

Source: Blaige & Company


Thermoforming

Average = 13 Deals

3 4 3 3 5 3 3

9 85

62

16

8 2

12

7

6 8 12

0

5

10

15

20

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010Industrial Packaging

6

19

11

7

15

10

1516 17

9

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Thermoforming Headline DealsThermoforming Headline DealsKey Industry Participants Have Been Very Active Key Industry Participants Have Been Very Active

Rohrer acquired by financial sponsor Shoreview IndustriesRohrer acquired by financial sponsor Shoreview Industries

Meadwestvaco divested its Klearfold brand to Hong Kong’s HLP PackagingMeadwestvaco divested its Klearfold brand to Hong Kong’s HLP Packaging

Rank Group acquired Pactiv CorporationRank Group acquired Pactiv Corporation

– Blockbuster deal of 2010 - $6 billionBlockbuster deal of 2010 - $6 billion

– Pactiv acquired PWP Industries; adds successful food thermoforming before it Pactiv acquired PWP Industries; adds successful food thermoforming before it sells itself to Ranksells itself to Rank

Sonoco Products acquired Associated Packaging Technologies (Castle Harlan) for Sonoco Products acquired Associated Packaging Technologies (Castle Harlan) for $120 million$120 million

D&W Fine Pack (Mid Oaks) acquired Tri-City PackagingD&W Fine Pack (Mid Oaks) acquired Tri-City Packaging

Brentwood Industries acquired Reynolds Medical Thermoformed PackagingBrentwood Industries acquired Reynolds Medical Thermoformed Packaging

Oaktree Capital Management and Avenue Capital Group acquired a controlling Oaktree Capital Management and Avenue Capital Group acquired a controlling interest in Tekni-Plexinterest in Tekni-Plex


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Film & Sheet



Average = 67 Deals

13 9 12 12 16 23 1731 33

21

3322

54 62 58 4341

4559

70

0

20

40

60

80

100

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Industrial Packaging

31

6674 74

6658

76

92 91

46

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Film & Sheet Headline DealsFilm & Sheet Headline DealsKey Industry Participants Have Been Very ActiveKey Industry Participants Have Been Very Active

Amcor acquired Alcan’s global pharmaceutical business (80 plants) for $1.95 billion Amcor acquired Alcan’s global pharmaceutical business (80 plants) for $1.95 billion

– Also acquired Alcan Medical Flexibles for $66 million, B-Pack Due (CPP films, Also acquired Alcan Medical Flexibles for $66 million, B-Pack Due (CPP films, Italy) for $60 million, and Ball Corp’s blow molding business for $280 millionItaly) for $60 million, and Ball Corp’s blow molding business for $280 million

Printpack purchased Amcor’s N.C. Medical Flexibles Plant ($30 million sales)Printpack purchased Amcor’s N.C. Medical Flexibles Plant ($30 million sales)

Constantia Flexibles acquired by One Equity Partners; bought Amcor Tobepal in Spain Constantia Flexibles acquired by One Equity Partners; bought Amcor Tobepal in Spain for $118 millionfor $118 million

Berry Plastics acquired Pliant CorporationBerry Plastics acquired Pliant Corporation

India owned Bilcare acquired the Ineos Group global films business for $132 millionIndia owned Bilcare acquired the Ineos Group global films business for $132 million

Inteplast Group acquired Speci-Gard Medical PackagingInteplast Group acquired Speci-Gard Medical Packaging

Sigma Plastics acquired McNeely Plastic Films and Excelsior—Vancouver, representing Sigma Plastics acquired McNeely Plastic Films and Excelsior—Vancouver, representing a total of 26 deals completed since 1990a total of 26 deals completed since 1990


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Blow Molding

Average = 17 Deals

3 1 1 1 18 8

24

7

20 24 22

15 10

25

0

5

10

15

20

25

30

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010Industrial Packaging

8

24

10

2124 23

1511

26

8

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Blow Molding Headline DealsBlow Molding Headline DealsKey Industry Participants Have Been Very Active During the Key Industry Participants Have Been Very Active During the Past YearPast Year Graham Packaging (Blackstone Group) acquired Graham Packaging (Blackstone Group) acquired

Liquid Container (Mid Oaks Investments)Liquid Container (Mid Oaks Investments)– Mid Oaks sold Liquid Container for $568 million after Mid Oaks sold Liquid Container for $568 million after

holding the company for 20 yearsholding the company for 20 years

Irving Place Capital acquired Alpha Packaging Irving Place Capital acquired Alpha Packaging (Stonehenge Partners) (Stonehenge Partners)

Embotelladoras Arca SAB de CV acquired Embotelladoras Arca SAB de CV acquired Ecuador Bottling CompanyEcuador Bottling Company– Deal was completed for $345 millionDeal was completed for $345 million


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© Copyright 2011, All Contents Thomas Blaige & Co. LLC Source: Blaige & Company

Label

Average = 40 Deals

15 19 18

4325 23 29 337

9 12

17

2613

1219

0

10

20

30

40

50

60

70

2003 2004 2005 2006 2007 2008 2009 2010Converters Supply Chain

28 30

605251

3641

22

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Label Headline DealsLabel Headline DealsKey Industry Participants Have Been Very ActiveKey Industry Participants Have Been Very Active

YORK Label (Diamond Castle Holdings) was acquired by Multi-Color YORK Label (Diamond Castle Holdings) was acquired by Multi-Color Corp. $356 millionCorp. $356 million

– York had recently acquired Southern Atlantic Label, marking the York had recently acquired Southern Atlantic Label, marking the company’s 9company’s 9thth acquisition prior to its acquisition by Multi-Color. acquisition prior to its acquisition by Multi-Color.

Private equity group First Atlantic Capital acquired Resource Label Group in Private equity group First Atlantic Capital acquired Resource Label Group in April, 2011.April, 2011.

– In August, 2011 Resource Label acquired Pamco Printed Tape & LabelIn August, 2011 Resource Label acquired Pamco Printed Tape & Label

In 2010 Novacap acquired Smyth CompaniesIn 2010 Novacap acquired Smyth Companies

– The Hickey family previously owned and operated Smyth for more than The Hickey family previously owned and operated Smyth for more than 100 years100 years

– In 2011 Smyth acquired Dow IndustriesIn 2011 Smyth acquired Dow Industries

Financial sponsor Genstar Capital sold Fort Dearborn to KRG CapitalFinancial sponsor Genstar Capital sold Fort Dearborn to KRG Capital© Copyright 2011, All Contents Thomas Blaige & Co. LLC

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Fiber Packaging & Materials

Average = 49

43

29

48 4651

29

43

7380

0

20

40

60

80

100

2002 2003 2004 2005 2006 2007 2008 2009 2010

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Fiber Packaging and Materials Headline DealsFiber Packaging and Materials Headline DealsKey Industry Participants Have Been ActiveKey Industry Participants Have Been Active A&R Carton (AlhstrA&R Carton (Alhström) merged with Flextrus (Accent Equity) to öm) merged with Flextrus (Accent Equity) to

form the €500 million Arch Packagingform the €500 million Arch Packaging

Clondalkin Group PLC Clondalkin Group PLC acquired Catalent Printed Componentsacquired Catalent Printed Components

Rock-Tenn acquiring Smurfit-Stone Container for $3.5 billionRock-Tenn acquiring Smurfit-Stone Container for $3.5 billion

Chesapeake Corporation (Irving Place Capital) acquired Cortegra Group from Chesapeake Corporation (Irving Place Capital) acquired Cortegra Group from Menasha CorporationMenasha Corporation

– In 2010 Chesapeake Corporation acquired leading Polish label and carton In 2010 Chesapeake Corporation acquired leading Polish label and carton manufacturer Cezar SAmanufacturer Cezar SA

Colbert Packaging completed two acquisitions:Colbert Packaging completed two acquisitions:

– Dayton CartonDayton Carton

– Crown Paper BoxCrown Paper Box

Tegrant acquired Dot PackagingTegrant acquired Dot Packaging

Caraustar filed for Chapter 11 bankruptcy Caraustar filed for Chapter 11 bankruptcy © Copyright 2011, All Contents Thomas Blaige & Co. LLC

Page 30

Clondalkin Group

CLONDALKIN GROUP

Packaging Segment Consolidation AnalysisPackaging Segment Consolidation AnalysisWatch List: Active Acquirers in Packaging


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Precedent Transaction MultiplesPrecedent Transaction Multiples


Average 2010Packaging Segment EBITDA Multiples*

Flexibles 7.5xRigid Plastics 7.1xLabels 7.0xFiber 5.3xOverall Average 7.0x*Blaige & Company estimate based on historical data

Page 32

The Art of the Deal:The Art of the Deal:Maximizing Value in M&A Maximizing Value in M&A

TransactionsTransactions


Page 33

Maximizing Value in M&A TransactionsMaximizing Value in M&A Transactions Important Quote: The Art Versus the Science of Deal MakingImportant Quote: The Art Versus the Science of Deal Making

““The merger business is 10% financial The merger business is 10% financial analysis and analysis and

90% psychoanalysis”90% psychoanalysis”

– – Financier: The Biography of André Meyer: A Financier: The Biography of André Meyer: A Story of Money, Power, and the Reshaping of Story of Money, Power, and the Reshaping of American BusinessAmerican Business


Page 34

Value to Prospective BuyerValue to Prospective Buyer

Maximizing Value in M&A Transactions Maximizing Value in M&A Transactions Franchise Value Can Far Exceed Financial ValueFranchise Value Can Far Exceed Financial Value

M&AValuatio

n

Lowest

Highest

Valuation Multiples

Lowest Multiples

Highest Multiples

Market Share Fold-ins

Key Customer Relationships

Geographic Market Expansion

Complementary Products

New Product Market Beachhead

New Brands or Franchises

New Technologies


Page 35

Maximizing Value in M&A TransactionsMaximizing Value in M&A Transactions Documenting and Demonstrating Franchise ValueDocumenting and Demonstrating Franchise Value

Effective Positioning is Critical to Get Full “Credit”Effective Positioning is Critical to Get Full “Credit”

– Detail and document strengths and opportunities Detail and document strengths and opportunities Confidential MemorandumConfidential Memorandum

– Focus on future potential and synergies, Focus on future potential and synergies, not past historynot past history

– Involve key managers – they must “own” the processInvolve key managers – they must “own” the process

– Identify and address the negative issues up frontIdentify and address the negative issues up front

– Prepare a compelling Management Presentation to Prepare a compelling Management Presentation to showcase your team’s vision and capabilitiesshowcase your team’s vision and capabilities

– Absolutely do not miss your budgets during the processAbsolutely do not miss your budgets during the process

Start Now! For each year that you Start Now! For each year that you planplan for a deal you add for a deal you add 10% to your valuation.10% to your valuation.


Page 36

Maximizing Value in M&A TransactionsMaximizing Value in M&A TransactionsAlthough Very Tempting, Although Very Tempting, NeverNever Consider a Preemptive Offer Consider a Preemptive Offer

Seller

Buyer

ManagementPresentation

Multiple Offers

LOI Negotiation

Exclusivity to Buyer

Closing

Leve

rag

e


Page 37

Maximizing Value in M&A TransactionsMaximizing Value in M&A Transactions A Single Offer is Likely to Converge at 70% of the Final Price A Single Offer is Likely to Converge at 70% of the Final Price Due to Competitive PressureDue to Competitive PressureCompetition = Maximum ValueCompetition = Maximum Value

Serious Indications of Interest(typically 10 data points)

0% 15%

30%

45%

60%

75%

90%

Valuation (% of Final Transaction Price)

Num

ber o

f Buy

ers

Final Transaction Price


Page 38

SummarySummary


Page 39Objectives for You – How to “Win”Objectives for You – How to “Win”

Today’s presentationToday’s presentation-- To assist each participant on a personal, -- To assist each participant on a personal, professional and corporate level to maximize potential in an professional and corporate level to maximize potential in an increasingly challenging business environment.increasingly challenging business environment.


Page 40Summary: Success in ConsolidationSummary: Success in Consolidation

Understand Risks,Understand Risks,Opportunities, and Your Opportunities, and Your SituationSituation

Develop a Plan: Lead, Follow, Develop a Plan: Lead, Follow, or Get Out of the Wayor Get Out of the Way

Execute (the Plan)Execute (the Plan)

Survive and Thrive (Win)Survive and Thrive (Win)

Good Luck!Good Luck!© Copyright 2011, All Contents Thomas Blaige & Co. LLC

www.blaige.com

Presentation to:

Global Packaging Consolidation: Lead, Follow, or Get Out of the WayLead, Follow, or Get Out of the Way

September 27, 2011 Las Vegas, Nevada

Documents

Www.blaige.com Presentation to: Global Packaging Consolidation: Lead, Follow, or Get Out of the Way September 27, 2011 Las Vegas, Nevada