Plastics and Packaging Manufacturer Completes a Sale and Equity Exchange to Strengthen Capital Structure

Portage Point advised a senior lender group through an independent enterprise value assessment and complex transaction negotiations

SITUATION OVERVIEW

A plastics and packaging manufacturer serving healthcare, consumer and industrial end markets experienced sustained margin pressure and underperformance amid broader macroeconomic headwinds. Cash flow constraints reduced covenant flexibility and increased pressure across the capital structure. Despite a $60 million preferred equity infusion intended to stabilize liquidity, tightening financial covenants heightened urgency as merger discussions advanced. Counsel to the ad hoc group of senior lenders engaged Portage Point to independently assess enterprise value, evaluate strategic alternatives and protect lender interests.

PORTAGE POINT APPROACH

• Delivered an independent full scale business case assessment integrating operational diligence, market benchmarking and forward-looking performance scenarios to establish a defensible enterprise value framework 
• Developed valuation and recovery analyses across multiple strategic paths, equipping senior lenders with clarity on relative outcomes and negotiation leverage 
• Led negotiations of a consensual transaction, including equity allocation mechanics and value-sharing constructs, aligning senior, junior and sponsor constituencies around a unified solution 

POSITIVE IMPACT

The consensual transaction delivered significant recovery and meaningful ownership in the combined entity. The outcome resolved complex capital structure dynamics and established a sustainable path forward under new ownership. Today the business operates with improved financial alignment and a stronger strategic platform positioned for long-term success.