Aurelius Equity Opportunities has agreed to sell its subsidiary Solidus Solutions to funds advised by Centerbridge Partners L.P. for an enterprise value of approximately €330 million. Solidus is a leading European producer of sustainable fibre based packaging solutions for food, beverage and horticulture, consumer goods and industrial applications.
Aurelius acquired Solidus in 2015 as a carve out from Smurfit Kappa Group, which was looking to divest its solid board and graphical board production mills, converters and sales offices across the Netherlands, Belgium and the UK.
Whilst modestly profitable, the company was no longer core to Smurfit Kappa Group’s strategy. Solidus required immediate focus and investment to put the business onto a standalone basis and improve its performance.
With significant experience in the complex process of carving out non core divisions from multinational organisations, Aurelius was the investor of choice. The company was able to conduct the transaction quickly, taking over the business from its previous owner, rebranding it as Solidus Solutions and establishing the company as a standalone platform.
After the acquisition, Aurelius undertook immediate action to reposition Solidus business for growth. This included implanting operational experts into the business to implement the installation of new IT infrastructure and to establish new financial and legal internal structures. After this initial phase, Aurelius commenced a comprehensive investment programme of €60 million in total, which involved a restructuring to integrate the production mills and converting sites and establish shared services, a redesign of Solidus’ organisational structures and processes, and a reduction of costs across the business to improve its price competitiveness. Aurelius also supplemented the existing management team with new professionals with considerable leadership experience. This hands-on transformation programme created a solid foundation for Solidus ahead of the next stage of its development.
The next phase in Aurelius’ transformation of Solidus involved the significant expansion of its geographic footprint and operational efficiency through three strategic and highly synergistic acquisitions. In a two year period, Solidus acquired and integrated Fibor Packaging in 2016, Abelan South in 2017 and Northern Paper Board in 2018, extending the company’s operations into France, Germany, Spain and UK, enhancing its sales by €135 million and enabling it to become a truly pan European operator. These acquisitions facilitated significant operational synergies across the business, including supply chain optimisation, capacity utilisation and customer cross selling.
These synergies were further bolstered by a world class maintenance programme, which involved significant organic investment by Aurelius into over 60 projects. These included upgrades and improvements to existing machinery and processes, targeted maintenance work to ensure efficiency of all machinery, the implementation of enhanced energy efficiency measures, a reduction in the costs of materials procurement, investment in automation and machinery, new product innovation, and a review of the company’s operational and commercial activities.
There is a strong and growing market opportunity for Solidus, as its recycled, fibre based products have become a compelling alternative to plastic packaging and polystyrene products and the market for its luxury packaging continues to grow strongly. Aurelius has supported Solidus in leveraging this opportunity to drive organic top line growth through the development and implementation of a carefully targeted sales strategy, enabling Solidus to penetrate new markets including fruit and vegetables in France, Fish in the Nordic region and Horticulture in Germany.
Today, Solidus is a leading fibre based sustainable packaging producer in Europe. It operates from 15 locations across seven countries the Netherlands, Belgium, France, Germany, Spain, Portugal and the UK, using leading manufacturing capabilities to produce and convert a diverse range of solidboard, graphicboard and coreboard products, which it sells to customers across 70 countries, worldwide.
Solidus’ experienced management team, highly stable and long standing customer base and new backing from Centerbridge Partners, provide the company with a strong foundation for future growth. In addition, the company has a strong pipeline of further strategic acquisition opportunities.
Dr Dirk Markus, group CEO and chairman of the executive board of Aurelius, said: ‘This sale is the largest and most successful exit for Aurelius to date, reflecting the significant effort placed into the business over the last four years. I would like to congratulate Solidus’ management under the superb leadership of Richard Houben and the members of the Aurelius task force that we placed into the business, all of whom did an outstanding job.
‘Since our acquisition of Solidus, the Aurelius task force team has provided hands on operational and mergers and acquisitions support to the company, transforming it from an unloved orphan business into an independent, pan European operation and true market leader in its field, with significant growth potential. The success of this investment demonstrates the strength of Aurelius’ niche expertise and capabilities in carving out peripheral, non-core assets from corporations and transforming them into successful and sustainable standalone businesses. With our portfolio maturing, we do expect further exits for the upcoming months.’