8-K: Sealed Air 2025 Results Strong as CD&R Acquisition Nears

Sealed Air Corporation reported improved financial results for Q4 and Full Year 2025, with net earnings significantly up, as its $10.3 billion acquisition by CD&R progresses towards a mid-2026 close.

Summary

• Net sales for Q4 2025 increased 2.1% to $1.40 billion, but decreased 0.7% on a constant currency basis compared to Q4 2024.
• Full year 2025 net sales decreased 0.6% to $5.36 billion, or 1.2% on a constant currency basis compared to full year 2024.
• GAAP net earnings for Q4 2025 were $44 million ($0.30 diluted EPS), a significant improvement from near zero in Q4 2024.
• Full year 2025 GAAP net earnings surged 63.7% to $441 million ($2.99 diluted EPS) compared to full year 2024.
• Adjusted EBITDA for Q4 2025 grew 2.7% to $278 million, and for full year 2025 increased 2.1% to $1,134 million.
• Adjusted diluted EPS for Q4 2025 was $0.77, and for full year 2025 was $3.34, up 6.4% compared to full year 2024.
• The company is in the process of being acquired by funds affiliated with CD&R in an all-cash transaction with an enterprise value of $10.3 billion, or $42.15 per share.
• Stockholders adopted the merger agreement on February 25, 2026, with closing expected in mid-2026, after which Sealed Air will become a privately held company.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this filing positively due to the significant improvement in GAAP earnings, solid adjusted metrics, and the clear path to a favorable all-cash acquisition for shareholders, despite some underlying constant currency sales declines.

Positives

• GAAP Net Earnings for Q4 2025 significantly improved to $44 million from near zero in Q4 2024.
• Full year 2025 GAAP Net Earnings increased by 63.7% to $441 million, and Diluted EPS increased by 62.5% to $2.99.
• Adjusted EBITDA and Adjusted Diluted EPS showed positive growth for both Q4 and Full Year 2025.
• Lower operating costs driven by productivity benefits and cost reduction initiatives contributed to improved Adjusted EBITDA.
• Net debt decreased to $3.7 billion as of December 31, 2025, from $4.0 billion as of December 31, 2024, and the net leverage ratio improved to 3.2x from 3.6x.
• Resolution of an IRS audit favorably impacted the full year 2025 effective tax rate, which was 7.4%.
• The Protective segment showed strong Adjusted EBITDA growth of 21% in Q4 2025.
• The pending acquisition by CD&R at $42.15 per share represents a clear exit strategy and defined value for shareholders.

Negatives

• Net sales decreased on a constant currency basis for both Q4 2025 (0.7%) and Full Year 2025 (1.2%), indicating underlying business challenges.
• Volumes decreased for both Q4 2025 (less than 1%) and Full Year 2025 (1%).
• Unfavorable net price realization was noted in both Food and Protective segments for Q4 2025, and for the full year.
• Cash flow from operations decreased by 13.7% for the full year 2025 to $628 million compared to $728 million in 2024.
• The Q4 2025 effective tax rate was adversely affected by updates to estimates related to the IRS audit settlement and uncertain tax position accruals, resulting in a 56.6% rate.
• Food segment Adjusted EBITDA decreased by 3% in Q4 2025 due to lower volumes and unfavorable net price realization.

Risks

• Uncertainty regarding the timing, receipt, and terms of required governmental and regulatory approvals for the proposed acquisition, which could reduce anticipated benefits or cause the parties to abandon the transaction.
• Risk of any event, change, or circumstance that could lead to the termination of the merger agreement.
• Inability of the parties to satisfy the conditions to the transaction in a timely manner or at all.
• Risk of any litigation relating to the transaction.
• Adverse effects of the transaction and its announcement on the company's ability to retain customers, hire key personnel, maintain relationships with stakeholders, and on operating results and business generally.
• Adverse effects on the market price of the company's common stock if the transaction is not consummated.
• Possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events.
• The company's ability to raise capital and the terms of those financings.
• Risks posed by 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 that could adversely affect the company's sales, profitability, and productivity.
• The effects of animal and food-related health issues on the company's business.

Future Outlook

The company expects to become a privately held entity in mid-2026 following the completion of its acquisition by CD&R, after which its common stock will no longer be traded on the New York Stock Exchange. No further forward-looking financial guidance is provided due to the pending acquisition.

Management Comments

• Given the pending acquisition by funds affiliated with CD&R, Sealed Air will not be hosting a conference call and webcast to discuss the Fourth Quarter and Full Year 2025 Results.

Industry Context

StockSavvy.ai notes that the acquisition of Sealed Air by CD&R reflects a broader trend of private equity firms seeking to acquire established companies in stable, essential industries like packaging, especially those with strong brand recognition and a focus on sustainable solutions. This move allows CD&R to take a long-term view, potentially investing in operational efficiencies and market expansion away from public market pressures. The packaging industry continues to see consolidation and a push towards automation and sustainable materials, making Sealed Air an attractive target despite some recent challenges in constant currency sales and volumes.

Comparison to Industry Standards

• The filing does not provide specific comparable companies, projects, or results to assess Sealed Air's performance against global industry benchmarks. StockSavvy.ai cannot provide a detailed comparison based solely on the provided document.

Stakeholder Impact

• Shareholders: Will receive $42.15 per share in cash, representing a clear and defined return on investment. The company's stock will be delisted from the NYSE.
• Employees: The company will become privately held, which could lead to changes in corporate culture, compensation structures, or potential restructuring, though not explicitly detailed in the filing.
• Customers: The acquisition by a private investment firm with deep experience in the industrial and packaging industries could lead to strategic shifts in product offerings, service models, or market focus.
• Suppliers: Potential changes in procurement strategies or relationships as the company transitions to private ownership.
• Creditors: The reduction in net debt and improved leverage ratio prior to the acquisition suggests a stable financial position, but the change in ownership structure could impact future credit agreements.

Next Steps

• Receipt of remaining regulatory clearances for the acquisition.
• Satisfaction of other customary closing conditions for the acquisition.
• Closing of the acquisition by CD&R, expected in mid-2026.
• Sealed Air will become a privately held company and its common stock will no longer be traded on the New York Stock Exchange after closing.

Key Dates

Recommendation

The definitive agreement for acquisition by CD&R at $42.15 per share in cash, with stockholder approval already secured and closing expected in mid-2026, provides a clear and attractive exit for shareholders. The reported financial results, particularly the significant increase in GAAP net earnings and improved leverage ratio, further support the company's underlying value leading into the acquisition. For investors, buying shares below the $42.15 acquisition price offers a near-term arbitrage opportunity with a high probability of completion.

Keywords

Sealed Air, SEE, Q4 2025 Earnings, Full Year 2025 Results, CD&R Acquisition, Packaging Solutions, Financial Results, Merger Agreement, Protective Packaging, Food Packaging, Adjusted EBITDA, Diluted EPS, Cash Flow, Net Debt, NYSE Delisting, Private Equity Acquisition