Silgan to contribute metal containers unit to AIP partnership, which will buy Trivium Packaging

Silgan Holdings Inc. (SLGN) said in a filing Monday that it signed agreements on Oct. 17 to form a partnership with an investment vehicle affiliated with funds managed by AIP, LLC. The partnership would buy Trivium Packaging B.V., a private company organized under Dutch law.

Under the Transaction Agreement, Silgan will contribute its Metal Containers and Closures Business to a subsidiary, Silgan Metal Packaging LLC, in exchange for 60% of that subsidiary's Class A voting units.

The business makes metal food and general line containers, metal and plastic vacuum closures, plastic dairy closures and aluminum roll-on closures for beer and non-alcoholic beverages.

The investment vehicle, A-VL Holdco, LP, will contribute $1.025 billion in cash at closing in exchange for the remaining 40%.

Silgan Holdings LLC, a wholly-owned subsidiary of the company, will receive a distribution of $2.263 billion from the subsidiary, minus any new Silgan debt. The company may incur up to $1.0 billion of new debt for this purpose.

Under a Put Option Agreement, the Trivium sellers can require the subsidiary to buy all of Trivium's shares. The put can be exercised only after works council and Dutch Merger Code consultations are complete.

The sellers must exercise the put within five business days of completing those consultations. The option expires nine months after signing.

Under the form of share purchase agreement attached to the put option, the subsidiary would pay the sellers approximately $327.5 million in cash, subject to adjustments.

The buyer would also assume about $3.1 billion of Trivium debt as of the filing date. That debt is scheduled to be repaid at closing.

The agreement uses a locked box mechanism that fixes Trivium's equity value as of Dec. 31, 2025.

Wells Fargo, Goldman Sachs, Royal Bank of Canada, Deutsche Bank and Bank of America have committed, subject to customary conditions, to a new senior secured term loan of about $4.9 billion and a $1.0 billion senior secured revolving facility.

The subsidiary's receipt of that debt financing is not a condition to its obligation to close.

Silgan and its other subsidiaries will not guarantee the subsidiary's senior secured debt, and none of their assets will secure it, the filing said.

At closing, the subsidiary's board will have five directors, three designated by Silgan and two by the investor. Anthony J. Allott, Silgan's non-executive chairman, will serve as the subsidiary's chairperson.

Separately, Silgan signed a consulting agreement with Allott. It provides a consulting fee of $250,000 a month before closing, an up-front fee of $250,000 a month for November 2025 through signing, and an additional $150,000 a month contingent on both closings.

After closing, Allott will also serve as interim chief executive of the subsidiary until a chief executive is named.

Silgan may spin off the subsidiary in a transaction intended to be tax-free. A spin-off cannot be completed before the second anniversary of closing without the consent of both parties.

The investor may require Silgan's subsidiary to buy at least 20% and up to 33.33% of its initial units during a 30-day window that opens four years after closing.

The buyout price is based on 8.25 times the subsidiary's trailing earnings before interest, taxes, depreciation and amortization, less net debt.

Closing requires the concurrent closing of both transactions, antitrust clearance including under the Hart-Scott-Rodino Act, and other customary conditions. The Transaction Agreement can be terminated if closing has not occurred by Oct. 15, 2027.

The Trivium purchase agreement has an outside date of Oct. 14, 2027, which extends to April 12, 2028 only in certain circumstances. The subsidiary would owe Trivium a $40 million termination fee if it fails to close, and a $75 million fee if the Transaction Agreement terminates.

The filing does not give a combined value for the transactions.