Thursday 27 April 2017

Coulson's Ardagh will eye further acquisitions

Ardagh Chairman Paul Coulson
Ardagh Chairman Paul Coulson
John Mulligan

John Mulligan

An ebullient Paul Coulson has insisted that the Ardagh packaging giant he helped to create is only halfway through what he described as a "phenomenal adventure" following its New York Stock Exchange flotation yesterday that valued the group at about $5.2bn (€4.88bn) after its shares surged 18pc.

The executive chairman of the company, Mr Coulson (65) owns about 36pc of Ardagh - a stake now worth around $1.87bn (€1.75bn) after shares in the firm rose.

And he said that Ardagh will continue to hunt for acquisitions in the United States and Europe, and will also look at further purchases in Brazil.

Ardagh sold a 6.9pc stake in the business to investors, securing proceeds of $307.8m, which will be used to help reduce its €7.2bn debt pile - amassed after years of acquisitions that have transformed Ardagh into a global player.

It manufactures 84 billion packaging units every year, and its clients include Heineken, L'Oreal and John West. Its revenue was €6.34bn last year. Earnings before interest, tax, depreciation and amortisation (EBITDA) were €1.16bn. Last year, it paid €3.2bn to buy assets from rivals Ball Corporation and Rexam.

"It's not all about money," said the financier, who was born in Britain to what he previously described as a "very poor family". He built Ardagh, which has its roots in Irish Glass, over the past 20 years. "It's been a phenomenal adventure for us," he told the Irish Independent "There's a huge sense of pride within the organisation and the people who work for us."

Chief executive Ian Curley said that it's a "great business to be in".

The flotation also thrusts Mr Coulson into the public limelight.

"The fact that the number is opposite your name in terms of the value of shares, well, for me this is a key step for us," he said of the initial public offering. "We've haven't reached half time yet in this game at all yet. There's a lot to do. It's not about me personally. This is a very big business with 24,000 people."

Ardagh had previously announced but pulled plans for stockmarket debuts. But Mr Coulson said that this time around the company was determined to list.

"We were very determined to do this this time. We'd structured it to be a relatively small amount of money raised because we wanted to be able to do it irrespective of market conditions. Now as it turns out, our timing is near perfect because market conditions are great," he said.

He also insisted that Ardagh doesn't need the cash the flotation generated.

"The reasons the debt markets and the bond markets love our kind of company is the free cash flow and the stable cash flow," he said. "It generates a lot of cash and that's why we've been able to build the business over 20 years without any equity issues."

He expects Ardagh's debt to EBITDA ratio to fall from the current five-times to about four times in a couple of years.

"We do now have the advantage that we can issue new shares if we want to on an acquisition… but I don't see us issuing any shares, and the holdco is not going to sell any shares at the moment anyway."

He said future acquisitions would be funded through debt and equity.

 

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