Ardagh hoping to seal $880m deal for US glassmaker ahead of IPO
PACKAGING firm Ardagh Group is to spend more than three-quarters of a billion dollars for a US glass manufacturing firm and renew efforts to go public.
The group, which is part-owned by businessman Paul Coulson, said it would pay $880m (€721m) for Anchor Glass Container Corporation from the private equity group Wayzata Investment Partners.
Assuming the deal is approved by regulators, Ardagh expects the transaction to close by the end of next month.
Once the acquisition is complete, Ardagh then intends to resurrect plans to seek a public listing, assuming market conditions are favourable.
The group announced it intended to join the New York Stock Exchange last year but was forced to pull its planned listing after turmoil gripped the markets.
Now, however, Ardagh has said it is "committed to raising equity as soon as practicable following the closing of the transaction and intends, subject to market conditions, to seek a public listing".
Yesterday's takeover catapults Luxembourg-based Ardagh into the top echelon of firms in the US glass packaging business.
Tapa-based Anchor makes a variety of bottles and other containers, and is best known in the industry for making bottles for a wide range of beers and other drinks, including the Sam Adams brand in the US. It is the number three player in its sector.
It produces approximately 5.6 billion containers a year from eight facilities in the US, employing some 2,700 staff. The company did not reveal its profits but has annual revenues of some $800m (€656m).
Mr Coulson, who chairs the group, said the deal would increase the size of Ardagh's business dramatically.
"The acquisition of Anchor will increase the size of our glass business by almost 50pc and is a very significant step in developing our operations in the US.
"It will result in approximately 25pc of Ardagh's EBITDA being generated in the US and it is an important milestone in the evolution of Ardagh as it will add scale and value to our global packaging franchise."
The deal is the latest in a string of recent acquisitions that were completed by the company. In March, Ardagh spent €230m on New Jersey-based Leone Industries, and a bigger acquisition had been expected since then.
To fund the deal, Ardagh will issue two bonds, maturing in 2017 and 2020 respectively, which will raise about $920m.
Last night Moody's affirmed the group's corporate family rating of B2 but cut the outlook to "negative" from "stable".
News of the acquisition and plan to go public came as the firm released an interim management statement in which it said revenues for the three months to June 30 would be "slightly ahead" year-on-year, but earnings before interest, tax, depreciation and amortisation (EBITDA) would be down by "mid to high single digit percentage".
"This is mainly due to reduced metal and glass container volumes, lower engineering volumes, time lags in revenue increases to offset cost inflation and the absence of carbon credit sales being only partially offset by a contribution from acquisitions, cost efficiencies and foreign exchange differences," the firm said.