LUXEMBOURG, July 15, 2019 /PRNewswire/ -- Ardagh Group
("Ardagh") announces today that it has entered into an
agreement to combine its Food & Specialty Metal Packaging
business ("Food & Specialty") with the business of Exal
Corporation ("Exal"), a leading producer of aluminum containers, to
form Trivium Packaging ("Trivium"), a global leader in metal
packaging.
![Ardagh Group logo 2019 Ardagh Group logo 2019](https://mma.prnewswire.com/media/946748/Ardagh_Group_Logo.jpg)
The combination of Food & Specialty with Exal, currently
controlled by Ontario Teachers' Pension Plan Board ("Ontario
Teachers'"), will create one of the largest metal packaging
companies in the world. Trivium will be headquartered in
the Netherlands and will operate
57 production facilities, principally across Europe and the Americas, employing
approximately 7,800 people. Pro forma revenues and Adjusted EBITDA
in the twelve months ended March 31,
2019 were $2.7 billion and
$469 million respectively. In
addition, Trivium expects to derive net combination benefits of
approximately $40 million over the
next few years, from the pursuit of commercial and operational
excellence opportunities.
Trivium will serve a diverse range of leading multinational,
regional and local customers operating in a wide array of end
markets, including food, seafood, pet food, nutrition, beauty and
personal care, household care and premium beverages.
This complementary transaction will combine Food &
Specialty's leading presence in Europe and North
America, principally focused on tin-plate steel packaging,
with Exal's leadership in Americas aluminum aerosol packaging.
Trivium will produce an extensive and sustainable product range,
backed by dedicated research and development resources,
underpinning the businesses' reputation for customer service,
quality and innovation.
Paul Coulson, Chairman and CEO of
Ardagh, will be Chairman of Trivium. Michael Mapes, CEO of Exal, will be CEO and will
lead a highly experienced team drawn from across both businesses.
Upon completion of the transaction, Ardagh will hold a 43 per cent
stake in Trivium, with 57 per cent controlled by Ontario Teachers'.
Ardagh will also receive approximately $2.5
billion in cash proceeds.
Completion of the transaction is subject to the satisfaction of
customary closing conditions, including receipt of regulatory
approvals and confirmation of the participation of certain Ardagh
European entities in the transaction, which remains subject to
works councils' consultation. Completion is also subject to closing
of the debt financing expected to be announced by Trivium later
today. The transaction is expected to close in the fourth quarter
of 2019.
Paul Coulson, Chairman and CEO
of Ardagh and Chairman of Trivium said;
"Ardagh is delighted to partner with Ontario Teachers' as
shareholders in Trivium, a combination of two highly complementary
and well-invested businesses. Trivium has the products, customers,
innovation capabilities and leadership team to deliver continued
growth and success, as brand owners and consumers increasingly seek
sustainable packaging solutions."
Jane Rowe, Executive Managing
Director, Equities, Ontario Teachers' commented;
"In forming Trivium we are bringing together two leading
businesses to create a global packaging company that is
well-positioned to capitalise on current market trends. We are
pleased to establish a partnership with Ardagh and believe our
alignment on long-term value creation will be a critical driver for
future success of the enterprise."
Michael Mapes, CEO of Trivium
said;
"I am honoured to lead Trivium, which combines two great
organizations with a history of customer service and innovation
derived from exceptional people and long-term customer
relationships. Trivium establishes a focused global leader at a
time when metal packaging is poised to provide a compelling
solution to help address the sustainability concerns facing
consumers, brand owners, and governments. I'm very excited about
Trivium's prospects for future success."
Current Trading
Food & Specialty
We expect our performance in the second quarter of 2019 to be as
follows:
Revenue of $557 million to show a
decrease of $37 million on the second
quarter of 2018 (which was $594
million). Excluding currency translation effects of
$34 million, revenue decreased by
$3 million, principally due to the
closure of a facility in North
America in late-2018, offset by the pass through of higher
input costs.
Adjusted EBITDA of $85 million to
show a decrease of $2 million on the
second quarter of 2018 (which was $87
million). Excluding adverse currency translation effects of
$5 million, Adjusted EBITDA increased
by $3 million compared with the
second quarter of 2018, as favourable IFRS 16 effects were partly
offset by lower volumes due to the closure of a facility in
North America in
late-2018.
Citigroup acted as exclusive financial adviser to Ardagh and
Shearman & Sterling LLP was lead legal adviser to
Ardagh.
Evercore Group LLC and BMO Capital Markets acted as financial
advisers to Ontario Teachers' and Weil, Gotshal & Manges LLP
was lead legal adviser to Ontario Teachers'.
Notes
1. Food & Specialty, principally located in
Europe and North America, recorded revenue and Adjusted
EBITDA of $2.4 billion and
$355 million respectively on a
carve-out basis in the twelve months ended March 31, 2019.
2. Upon completion, Ardagh intends to use the $2.5 billion in cash proceeds from this
transaction as follows:
a) Repay outstanding drawings under Ardagh's current
asset-backed loan facility (and permanently reduce commitments) by
$150 million;
b) Consider, based on the circumstances around the time of
the completion date, closing derivative positions of approximately
$5 to $10
million in out-of-the-money swaps;
c) Exercise the optional redemption provisions, at the
applicable redemption premium, of Ardagh's existing 4.625% Senior
Secured Notes due 2023 and 4.125% Senior Secured Notes due 2023,
for total consideration of approximately $1.55 billion;
d) Undertake an excess proceeds offer (as defined in the
relevant indentures) of the 4.250% Senior Secured Notes due 2022
and 2.750% Senior Secured Notes due 2024 at par on a pro rata
basis; and
e) To the extent any proceeds remain, call Ardagh's
existing 6.750% Senior Notes due 2024.
For more information please visit
ardaghgroup.com
Notes to the editor
Ardagh Group is a global supplier of infinitely
recyclable, metal and glass packaging for the world's leading
brands. Ardagh operates more than 100 metal and glass production
facilities in 22 countries across five continents, employing over
23,000 people with sales of $9bn.
The Ontario Teachers' Pension Plan (Ontario
Teachers') is Canada's
largest single-profession pension plan, with $191.1 billion in net assets at Dec. 31, 2018. It holds a diverse global
portfolio of assets, approximately 80% of which is managed
in-house, and has earned an annual total-fund net return of 9.7%
since the plan's founding in 1990. Ontario Teachers' is an
independent organization headquartered in Toronto. Its Asia-Pacific region office is located in
Hong Kong and its Europe, Middle
East & Africa region
office is in London. The
defined-benefit plan, which is fully funded, invests and
administers the pensions of the province of Ontario's 327,000 active and retired teachers.
For more information, visit otpp.com and follow us on
Twitter @OtppInfo.
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SOURCE Ardagh Group S.A.