8-K: Sealed Air Discloses Pro Forma EBITDA for CD&R Acquisition Debt

Sealed Air Corporation provides pro forma adjusted EBITDA figures to prospective lenders as it seeks debt financing for its acquisition by affiliates of Clayton, Dubilier & Rice.

Summary

• Stockholders of Sealed Air Corporation approved the acquisition by affiliates of Clayton, Dubilier & Rice (CD&R) on February 25, 2026.
• The company is making financial information available to prospective lenders to obtain debt financing for a portion of the acquisition amount and related fees.
• Pro Forma Adjusted EBITDA for the years ended December 31, 2025, 2024, and 2023 was $1,329.1 million, $1,127.4 million, and $1,171.6 million, respectively.
• This non-GAAP measure is presented to assist prospective lenders in evaluating the company's liquidity and ability to service its debt post-transaction.
• The Pro Forma Adjusted EBITDA for 2025 includes $6.0 million in 'Public to private savings' and $125.0 million in 'Cost saves'.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a positive step towards the completion of the acquisition, with the provision of financing details indicating progress. The projected cost savings also contribute to a favorable outlook for the post-acquisition entity.

Positives

• Stockholders have approved the acquisition, indicating progress towards the transaction's completion.
• The company projects significant 'Public to private savings' of $6.0 million for 2025 and 'Cost saves' of $125.0 million for 2025, which are expected to enhance post-acquisition financial performance.
• The Pro Forma Adjusted EBITDA for 2025 of $1,329.1 million shows a notable increase compared to previous years, partly driven by these anticipated savings.

Negatives

• Pro Forma Adjusted EBITDA is a non-GAAP financial measure with limitations as an analytic tool and should not be considered in isolation or as a substitute for GAAP measures.
• The non-GAAP measures presented are calculated differently than similarly named measures reported by other companies, which may limit comparability.

Risks

• The timing, receipt, and terms of any required governmental and regulatory approvals for the Transaction could reduce anticipated benefits or cause the parties to abandon the Transaction.
• The occurrence of any event, change, or other circumstance could give rise to the termination of the merger agreement.
• The parties to the merger agreement may not be able to satisfy the conditions to the Transaction in a timely manner or at all.
• There is a risk of any litigation relating to the Transaction.
• The Transaction and its announcement could have an adverse effect on the ability of the Company to retain customers, retain and hire key personnel, and maintain relationships with customers, suppliers, employees, and other business relationships.
• The Transaction and its announcement could have adverse effects on the market price of the Company's common stock.
• The possibility exists that the parties may not achieve some or all of any anticipated benefits, and the Transaction may not be completed in accordance with expected plans or at all.
• Restrictions on the Company's conduct during the pendency of the Transaction may impact its ability to pursue certain business opportunities.
• The Transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events.
• The occurrence of any event, change, or other circumstance could give rise to the termination of the merger agreement, potentially requiring the Company to pay a termination fee.
• The Company's stock price may decline significantly if the Transaction is not consummated.
• Risks related to the Company's ability to raise capital and the terms of those financings.
• Legislative, regulatory, and economic developments affecting the Company's business pose a risk.
• General economic and market developments and conditions, including federal monetary policy, trade policy, sanctions, interest rates, labor shortages, supply chain issues, changes in raw material pricing and availability, energy costs, and environmental matters, could impact the business.
• Changes in consumer preferences and demand patterns could adversely affect the Company's sales, profitability, and productivity.
• The effects of animal and food-related health issues on the Company's business are a risk.

Future Outlook

The company anticipates the completion of its acquisition by CD&R affiliates. It projects significant 'Public to private savings' and 'Cost saves' post-transaction, which are incorporated into the Pro Forma Adjusted EBITDA figures provided to prospective lenders. The completion of the transaction remains subject to various conditions and risks.

Management Comments

• Management cost saves are represented as actioned and unactioned, contributing to the Pro Forma Adjusted EBITDA calculations.

Industry Context

StockSavvy.ai notes that the packaging industry, where Sealed Air operates, often sees private equity interest due to stable cash flows and opportunities for operational efficiencies. The acquisition by CD&R, a prominent private equity firm, aligns with this trend, aiming to unlock value through strategic cost reductions and a transition to a private structure.

Comparison to Industry Standards

• StockSavvy.ai observes that the projected 'Public to private savings' and 'Cost saves' totaling $131 million for 2025 are substantial, representing approximately 10% of the Pro Forma Adjusted EBITDA. This aggressive cost-saving target is typical for private equity buyouts, which often seek to streamline operations and reduce public company overhead.
• For example, similar efficiency drives were seen in the acquisition of Multi-Color Corporation by Platinum Equity, where significant operational synergies were targeted post-takeover.

Management Changes

Stakeholder Impact

• Shareholders: Stockholders have approved the acquisition, leading to the company becoming privately held. The market price of common stock could be adversely affected if the transaction is not consummated.
• Employees: There is a risk of adverse effect on the ability to retain and hire key personnel.
• Customers: There is a risk of adverse effect on the ability to retain customers and maintain relationships.
• Suppliers: There is a risk of adverse effect on the ability to maintain relationships with suppliers.
• Creditors: The filing is specifically for prospective lenders to evaluate the company's ability to service debt post-transaction.

Next Steps

• Completion of debt financing for the acquisition.
• Finalization of the acquisition by CD&R affiliates.
• Realization of 'Public to private savings' and 'Cost saves' post-transaction.

Key Dates

Recommendation

The company's stockholders have already approved the acquisition by CD&R, and the current filing pertains to securing debt financing for this transaction. For existing public shareholders, the primary driver of the stock price will be the agreed-upon acquisition price, making a 'hold' recommendation appropriate as the company transitions to private ownership. New investment based on these pro forma figures is not relevant for public market trading.

Keywords

Sealed Air, SEE, Acquisition, Merger, CD&R, Clayton Dubilier & Rice, Debt Financing, Pro Forma Adjusted EBITDA, SEC Filing, 8-K, Corporate Governance, Packaging Industry, Private Equity