Bosch packaging sale ‘may be dampened by current hysteria about plastic’ says M&A expert

The decision comes at a time when Bosch Group wants to transform its organization, moving further into digitalization and the internet of things (IoT).

Food unit to expand

It claims PA has always been largely independent of Bosch Group and does not offer any benefits in terms of synergy and technology.

The food unit has also strengthened its core areas recently and will further expand its market position.

In a statement, Stefan Hartung, board member, Energy, Building Technology & Industrial Technology business sectors, Bosch, said a reorganized packaging technology business will have more flexibility in this typically SME market, which means Bosch will be free to focus on its impending transformation.

Speaking to Christine Giek, director, communications, Bosch Packaging Technology, she said despite the announcement ‘Bosch is in a very early stage of the whole process where no further details can be conveyed’.​

However, Hartung said Bosch Group’s strategy is ‘to structure its operations competitively’, continuously adjusting its business fields.

Speaking to Nick Mockett, head of Packaging M&A, Moorgate Capital, he said PA is a substantial business with over €1bn in revenues in recent years.

“The business focuses on pharmaceuticals and food industries, both of which tend to perform well in the event of a recession or slow down​,” he said.

“Pharmaceutical is a particularly interesting segment given the demographics of population growth, ageing population and the rising middle classes in emerging markets. The business is likely to attract buyers from the Private Equity community, where current estimates of “dry powder” are around $1.8 trillion​.

“Strategic acquirers will also look at the target. Given the consolidation in the packaging manufacturing industry competing or complementary machine producers will be keen to enhance their scale and negotiating position. However, appetite may be dampened by the current hysteria about plastic​.”  

Robert Bosch Manufacturing Solutions

The company believes its packaging technology operations need to be put on a different footing to react more flexibly to the specific requirements of the packaging machinery market.

Its machinery manufacturer Robert Bosch Manufacturing Solutions is a separate entity, and will remain part of the Bosch Group.

PA employs approximately 6,100 associates across 15 countries. All associates and locations will be retained by the eventual buyer.

According to Stefan König, chairman, managing board, Robert Bosch Packaging Technology, the past two fiscal years were difficult for certain PA units but under new management, it has begun to realign, with some initial success.

In a statement it said: “Many units are now in a good position to serve the growing market.

“In the years ahead, the company expects to see increasing demand. With its many technological USPs, the pharmaceuticals unit is developing encouragingly and growing​.

“The food unit has strengthened its core areas, and intends to further expand its market position​.”

König said the path we have chosen is clearly the right one and under new ownership its team will continue to provide customers with excellent manufacturing technology and services.

“PA has always led a largely independent existence within the Bosch Group, and will in the future be able to respond even better to the requirements of the packaging industry. Our customers will benefit from this​.”