With more than two decades of experience advising both buyers and sellers in the packaging industry, we’ve found that owners who prepare proactively in the specific areas outlined below not only streamline the sale process but also position themselves to achieve a stronger valuation.

Compliance Preparedness and Risk Management

Packaging businesses operate in a highly regulated environment, with standards driven by consumer safety, environmental concerns, and trade requirements. Lapses in compliance can significantly reduce valuation or even derail a deal.

Key considerations include:

• Environmental and sustainability compliance: Are you aligned with regulations around recyclability, compostability, and extended producer responsibility (EPR)? Buyers will want assurance that your products meet current and pending sustainability requirements.
• Health and safety standards: For food, beverage and pharmaceutical packaging, compliance with FDA, USDA or international health standards is essential. Certifications such as ISO 9001 or BRCGS Packaging may be viewed as differentiators.
• Labeling and claims: Any product marketed as “biodegradable,” “compostable,” or “recyclable” must meet specific legal definitions. Mislabeling can create liability and reputational risk.

Demonstrating a clean compliance record helps buyers feel confident that they aren’t inheriting hidden liabilities. Working with legal counsel or other qualified advisors helps address gaps proactively and also avoids delays or issues during due diligence.

Protecting Intellectual Property and Brand Value

In packaging, differentiation often comes from innovation — whether it’s proprietary materials, design, or technology. Protecting those assets before a sale is crucial.

Steps to take:

• Patents and trademarks: Ensure that patents on unique packaging technologies, designs, or materials are properly filed and enforceable. Trademarks for brand names, logos, and proprietary packaging lines should be current.
• Trade secrets: Formulations, barrier technologies, or unique production processes should be clearly documented as trade secrets, with confidentiality agreements in place with employees, contractors suppliers, and customers.
• Digital assets: Domain names, design files, and digital marketing assets should be owned by the company, not an individual founder.

Buyers will pay premiums for defensible intellectual property portfolios. Ambiguity about ownership or protection can undermine value and stall negotiations.

Strengthening Vendor and Customer Ties

The packaging industry is deeply tied to global supply chains, making stability a top concern for buyers. Volatility in raw materials such as paper, plastics, or specialty resins can create significant risks.

Areas of focus include:

• Vendor agreements: Ensure that supply contracts are up to date, transferable and provide adequate protection against shortages or price swings.
• Customer relationships: Long-term contracts with key customers — particularly in high-demand sectors such as food, pharmaceuticals, or ecommerce — strengthen buyer confidence.
• Sustainability sourcing: Highlight efforts to diversify suppliers and integrate renewable or recycled inputs. Buyers are increasingly attuned to ESG (environmental, social, governance) considerations.

A well-structured supply and customer contract base not only reassures buyers but also enhances valuation by demonstrating reliability and predictability.  It is important to work with legal counsel experienced in mergers and acquisitions prior to selling a packaging business to ensure vendor and supplier agreements are drafted in a manner to maximize value.

Financial Clarity and Valuation Drivers

Financial clarity is the backbone of any transaction. In packaging, buyers will scrutinize not just revenue, but also cost structures, customer concentration, and scalability.

Preparation should include:

• Clean financials: Ideally reviewed or audited, with personal or one-time expenses removed.
• Unit economics: Break down profitability by product line, material type, or customer segment. Which products or customers drive the strongest margins?
• Growth drivers: Showcase metrics such as contract renewals, new market penetration, ecommerce growth, or adoption of sustainable alternatives.
• Inventory management: Buyers will look closely at raw material reserves and finished goods turnover rates to evaluate efficiency.

Consistent, well-documented financial performance builds buyer trust and helps support premium valuations. Working with qualified advisors can help maximize value by identifying improvements to financial performance and potential EBITDA add-backs (such as non-recurring expense) to maximize value.

Team Retention and Leadership Continuity

Behind every packaging company is a team of engineers, designers, operations specialists, and sales professionals. Buyers want assurance that key people will stay on to maintain continuity post-sale.

Owners should focus on:

• Key employee agreements: Ensure that contracts with top talent are in place, including non-compete or confidentiality provisions where enforceable.
• Retention strategies: Offer stay bonuses, earnouts, or equity rollovers to keep essential team members engaged.
• Succession planning: If the owner is heavily involved in client relationships or operations, identify successors and put systems in place to ensure a smooth handoff.
• Culture documentation: Articulating a strong, innovation-driven culture reassures buyers that the company can thrive independently of the founder.

A stable, motivated team reduces integration risks for buyers and can significantly boost valuation.  Any agreements with key executives should be drafted by experienced counsel to provide tax-efficient incentive for the key executives but protect the owners in the event that the executive exits the business prior to a transaction closing.  

Exiting a packaging business isn’t just about putting it on the market — it’s about presenting it as a scalable, compliant, and future-ready company. By addressing these five areas — compliance, intellectual property, supply chain, financials, and talent — owners can position themselves for a smoother sale process and a stronger purchase price.