Packaging Report Is Optimistic

CHICAGO, IL | Mesirow Financial has released the Summer 2010 issue of its “Packaging Perspectives” newsletter. The news is promising, Mesirow reports, with a noticeable improvement across a number of fronts since this time last year. The economy is growing again; stock prices have recovered; credit markets have improved; and CEO confidence has increased. M&A activity during the first half of 2010 increased 25% year-over-year, aided by the improvement in packaging share prices and the improvement in the credit markets.

“However,” the newsletter cautions, “that is not to say we're back to the go-go days of 2006 and 2007. Macro-economic questions remain regarding sovereign debt, European growth rates, the health of the US consumer, the outlook for the Chinese economy, and the continued large role of deficit spending in the US economy.”

For now, though, interest rates are low, especially in the short maturity part of the yield curve, resulting in investors chasing yield and a re-emergence of both the corporate and high yield debt markets.

Also pointing to recovery: Acquisition multiples in packaging transactions also have started to improve, primarily due to higher public market multiples and more accommodative credit markets. Also, strategic acquirers continue to create value by consolidating industry segments.

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