DEFA14A: Sealed Air to Go Private in $10.3 Billion CD&R Acquisition

Sealed Air Corporation has agreed to be acquired by Clayton, Dubilier & Rice (CD&R) in an all-cash transaction valued at $10.3 billion, with stockholders receiving $42.15 per share.

Summary

• Sealed Air Corporation (NYSE: SEE) has entered into a definitive Agreement and Plan of Merger with Sword Purchaser, LLC, an affiliate of Clayton, Dubilier & Rice, LLC (CD&R).
• Under the terms, each share of Sealed Air common stock will be converted into the right to receive $42.15 in cash, without interest.
• The total enterprise value of the transaction is $10.3 billion.
• The per-share consideration represents a 41% premium to Sealed Air's unaffected stock price as of August 14, 2025, and a 24% premium to its 90-day VWAP as of November 12, 2025.
• Sealed Air's Board of Directors unanimously approved the merger agreement and resolved to recommend stockholder approval.
• The transaction is expected to close in mid-2026, subject to stockholder approval, regulatory clearances, and other customary closing conditions.
• A 'go-shop' provision allows Sealed Air to solicit alternative acquisition proposals until December 16, 2025 (or December 31, 2025, for 'Excluded Parties').
• Upon consummation, Sealed Air will become a privately held company, and its common stock will be delisted from the New York Stock Exchange.
• Committed equity financing is provided by a CD&R investment fund, and $7.9 billion in debt financing is committed by a group of financial institutions.
• The availability of Parent's financing is not a condition to the consummation of the Merger.

Sentiment

Score: 8

Explanation: The sentiment is highly positive due to the substantial premium offered to shareholders, unanimous board approval, and the strategic benefits anticipated from partnering with CD&R, despite the company going private.

Positives

• Stockholders will receive a significant premium of 41% over the unaffected share price as of August 14, 2025, and 24% over the 90-day VWAP as of November 12, 2025, providing immediate and certain cash value.
• The transaction is unanimously approved by Sealed Air's Board of Directors, indicating strong internal support for the deal.
• The company will benefit from CD&R's partnership, which is expected to enhance investment in growing its Food and Protective businesses, accelerate transformation, and foster innovation.
• Sealed Air's headquarters will remain in Charlotte, North Carolina, maintaining local presence and employment.
• The financing for the transaction is committed, and its availability is not a condition to closing, reducing financing risk for the deal.

Negatives

• The company's common stock will be delisted from the New York Stock Exchange, removing public trading access for investors.
• The 'go-shop' period, while allowing for superior proposals, introduces uncertainty regarding the finality of the current agreement until its expiration.
• The transaction involves significant debt financing ($7.9 billion), which will increase the company's leverage as a private entity.
• The company will incur termination fees of up to $205,108,189 under certain circumstances if the merger agreement is terminated.

Risks

• The timing, receipt, and terms and conditions of required governmental and regulatory approvals could reduce anticipated benefits or cause the parties to abandon the transaction.
• There is a possibility that the company's stockholders may not approve 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 litigation relating to the transaction.
• The transaction and its announcement could have an adverse effect on the company's ability to retain customers, hire key personnel, and maintain relationships with customers, suppliers, employees, and other business relationships, impacting operating results and business generally.
• 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 with respect to the company's business, and the transaction may not be completed as expected 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 due to unexpected factors or events.
• The company may be required to pay a termination fee under certain circumstances.
• 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.
• General economic and market developments and conditions, including federal monetary policy, trade policy, sanctions, export restrictions, interest rates, labor shortages, supply chain issues, changes in raw material pricing and availability, energy costs, and environmental matters.
• 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.
• Other risk factors and cautionary statements described in the company's Annual Report on Form 10-K for the year ended December 31, 2024, and Quarterly Report on Form 10-Q for the quarter ended September 30, 2025.

Future Outlook

The company anticipates entering a new phase of growth in partnership with CD&R, focusing on accelerating its ongoing transformation, investing in its Food and Protective businesses, and enhancing innovation, capabilities, and market reach. The transaction is expected to close in mid-2026, after which Sealed Air will operate as a privately held entity.

Management Comments

• Henry R. Keizer, Chairman of the Board of Sealed Air, stated, 'After careful review of strategic alternatives over the past year, the Board is confident that this transaction delivers significant value and is in the best interests of our stockholders and the Company. Furthermore, this transaction represents a realization of immediate and certain value for Sealed Air stockholders at a substantial premium and enables the Company to execute its long-term strategic vision.'
• Dustin Semach, President and Chief Executive Officer of Sealed Air, commented, 'Today marks an inflection point in Sealed Air's history and we look forward to embarking on this next phase of growth in partnership with CD&R. This transaction delivers significant and derisked value to Sealed Air stockholders while accelerating our ongoing transformation. CD&R's partnership will enhance our ability to invest in growing our Food and Protective businesses while maintaining a customer-first approach. Through more rapid innovation, expanded capabilities and broader reach, we will create more value for our customers and more opportunities for our employees.'
• Rob Volpe, Partner at CD&R, noted, 'Sealed Air is an exceptional global business with a talented leadership team, leading franchises and attractive underlying fundamentals. The Company has a strong foundation in its industry leadership, committed employee base, deep customer and supplier relationships, differentiated product portfolio and demonstrated operating capability. We are committed to supporting Sealed Air's continued investment in its people, assets, and product portfolio. We have great respect for Sealed Air's senior leadership team, and look forward to partnering with them.'

Industry Context

This acquisition reflects a broader trend of private equity firms acquiring established public companies, particularly those with strong market positions and attractive underlying fundamentals in stable industries like packaging. CD&R's deep experience in industrial and packaging sectors suggests a strategic move to leverage Sealed Air's leadership in food and protective packaging, potentially through operational improvements, accelerated innovation, and expanded market reach, away from public market pressures.

Comparison to Industry Standards

• The 41% premium to the unaffected stock price and 24% premium to the 90-day VWAP are substantial, indicating a strong valuation for Sealed Air compared to typical acquisition premiums in the industrial and packaging sectors.
• The enterprise value of $10.3 billion for a company with $5.4 billion in 2024 sales suggests a valuation multiple that is competitive within the packaging industry, reflecting Sealed Air's market leadership and differentiated product portfolio.
• The commitment of significant debt financing ($7.9 billion) by a consortium of major financial institutions (J.P. Morgan, BofA Securities, BNP Paribas, Goldman Sachs, UBS, Wells Fargo, Citi, Mizuho, RBC Capital Markets) demonstrates strong lender confidence in Sealed Air's financial health and future cash flow generation, aligning with typical financing structures for large-scale private equity buyouts.

Management Changes

Corporate Governance

Legal Proceedings

• The company will keep Parent informed about any stockholder litigation brought or threatened against the company or its directors/officers relating to the transactions.
• The company will give Parent the opportunity to participate in and consult on the defense and prosecution of any such litigation, and will not settle without Parent's consent.
• Holders of Company Common Stock who properly exercise appraisal rights under Delaware law (Dissenting Shares) will be entitled to statutory rights, and the company will notify Parent of any such demands.

Related Party Transactions

• Sword Purchaser, LLC (Parent) is affiliated with Clayton, Dubilier & Rice, LLC (CD&R), which is providing committed equity financing and has provided a limited guarantee for Parent's termination fee.
• The merger agreement details the treatment of Company Compensatory Awards (RSUs, PSUs, DSUs) for current and former employees and directors, converting them into cash rights based on the merger consideration.

Stakeholder Impact

• **Shareholders:** Will receive $42.15 per share in cash, representing a significant premium, providing immediate liquidity and a de-risked exit.
• **Employees:** Existing compensatory awards will be converted to cash rights. Base salary, hourly wage, and short-term cash bonus opportunities will be maintained for 12 months post-closing. Employee benefits (excluding certain types) will be no less favorable in aggregate for 12 months. Service credit will be recognized for eligibility, vesting, and vacation/PTO accrual in new plans. Labor agreements will continue to be honored.
• **Customers & Suppliers:** Management expects CD&R's partnership to enhance investment, innovation, and capabilities, potentially leading to improved products and services. However, there's a risk of adverse effects on relationships due to the transaction announcement.
• **Creditors:** Existing indebtedness under the Company Credit Agreement and Receivables Securitization Agreements will be repaid or refinanced. Provisions are made for the redemption or satisfaction and discharge of existing indentures, potentially impacting bondholders.
• **Management:** Current officers will remain officers of the Surviving Corporation. Directors of Merger Sub will become directors of the Surviving Corporation. Indemnification and D&O insurance provisions are maintained for current and former directors and officers.

Next Steps

• Sealed Air stockholders will be asked to vote on the adoption of the Merger Agreement at a special stockholder meeting to be announced.
• The company will prepare and file a proxy statement with the SEC for the stockholder meeting.
• The company will continue to solicit additional acquisition proposals from third parties during a 'go-shop' period until December 16, 2025 (or December 31, 2025, for Excluded Parties).
• The parties will work to obtain required regulatory clearances and satisfy other customary closing conditions.
• Upon closing, Sealed Air's common stock will be delisted from the New York Stock Exchange and deregistered under the Securities Exchange Act of 1934.
• The company will cause any director or officer to resign in such capacity at the written request of Parent, effective as of the Effective Time.

Key Dates

Recommendation

The filing details a definitive merger agreement where Sealed Air stockholders will receive $42.15 per share in cash. This represents a substantial premium of 41% to the unaffected stock price and 24% to the 90-day VWAP. The transaction has been unanimously approved by the Board, and financing is committed and not a condition to closing, significantly de-risking the deal. While regulatory approvals and stockholder vote are still required, the high premium and strong board support make this an attractive opportunity for investors to capture immediate, certain value. The 'go-shop' provision also offers a slight upside potential for a superior proposal, though the current offer is already very strong.

Keywords

Sealed Air, CD&R, Merger, Acquisition, Private Equity, Packaging Solutions, Food Packaging, Protective Packaging, NYSE Delisting, Cash Transaction, SEC Filing, Corporate Governance