Banks Arrange $7.15B Debt Facility for Sealed Air LBO at Mid-Market Leverage

A syndicate of banks has prepared a $7.15 billion debt package to finance the leveraged buyout of Sealed Air Corporation, the Charlotte-based packaging conglomerate with $5.5 billion in trailing revenue. The facility size positions this as one of the larger industrial LBO financings arranged since the Federal Reserve's rate cycle began compressing deal volume in early 2023.

The debt structure lands at roughly 4.2x trailing EBITDA, assuming Sealed Air's most recent twelve-month adjusted EBITDA of approximately $1.7 billion. That multiple sits comfortably within post-Volcker lending norms for industrial credits—well below the 5.5x to 6.0x stretch multiples that characterized 2021's LBO peak. The arranging banks have not been named in initial disclosures, though the facility's size suggests participation from at least four bulge-bracket institutions with private equity finance desks. Sealed Air trades in the packaging sector alongside Amcor and Berry Global, both of which carry net leverage between 3.8x and 4.5x.

The financing matters because it confirms that senior lenders have reopened the aperture for billion-dollar-plus industrial take-privates, provided leverage stays within the 4.0x to 4.5x corridor. Thatband has become the new equilibrium for credits without either distressed-debt taint or the secular tailwinds that justify aggressive pricing. Sealed Air's business—protective packaging, food packaging machinery, and Cryovac shrink films—generates stable free cash flow but faces input-cost volatility and modest organic growth. The arrangers are betting that $1.7 billion in EBITDA is durable enough to service $7.15 billion in debt without requiring heroic margin expansion.

For allocators, the signal is that private equity sponsors are no longer waiting for a rate cut before launching large industrial buyouts. The market has adjusted to a 5.5% base rate environment, and sponsors are willing to accept mid-teens unlevered IRR hurdles if the asset throws off predictable cash. The debt package also suggests that covenant-lite structures remain available for sponsor-grade credits, even at scale. That tilts the playing field toward firms with existing relationships at arranging banks and away from middle-market sponsors who lack the syndication horsepower to place $7 billion in a single tranche.

Watch for syndication results within three weeks—whether the facility prices inside SOFR + 375 bps or requires a step-up to clear the market. Also watch whether the buyer syndicates a portion of the debt into the private credit market, which would signal that even bulge-bracket arrangers are now hedging placement risk by carving out $500 million to $1 billion tranches for direct lenders. The buyer's identity, once disclosed, will clarify whether this is a continuation of Apollo's industrial roll-up strategy or a new entrant testing sponsor appetite for packaging assets.

Sealed Air's equity last traded near $35 per share, implying a transaction enterprise value around $11.5 billion when including existing net debt of roughly $4.3 billion. The new $7.15 billion facility will refinance that existing stack and fund the equity check, leaving the sponsor to contribute approximately $4.35 billion in dry powder.