Highlights
- Creates a global leader in plastic and recycled packaging
products
- Produces a balanced franchise across geographies, markets, and
substrates
- Combined pro forma sales of approximately $13 billion
- Expected annual synergies of $150 million
- Expected to be accretive to earnings and cash flow
Berry Global Group, Inc. (NYSE: BERY), today announced the
completion of its acquisition of RPC Group Plc (RPC) for a purchase
price of approximately $6.5 billion, which includes approximately
$4.3 billion of cash paid for the equity interest in RPC and $2.2
of net debt and estimated transaction related costs, subject to
closing adjustments. The combination of Berry and RPC creates a
leading global supplier of valued-added protective solutions and
one of the world’s largest plastic packaging companies.
Berry’s combined global footprint will consist of over 290
locations worldwide, including locations in North and South
America, Europe, Asia, Africa, and Australia. The pro forma
combined business will employ over 48,000 people across six
continents with sales of approximately $13 billion based on the
latest published financial statements of Berry and RPC.
“We are very excited to move forward together as a global
plastic and recycled packaging industry leader, serving thousands
of customers with our high-quality, innovative, and protective
solutions along with the industry’s most diversified and expansive
manufacturing footprint,” said Tom Salmon, Chairman and CEO of
Berry. “The acquisition of RPC will give us the opportunity to
leverage our combined know-how in innovative material science,
product development, and manufacturing technologies to create
significant value for our shareholders. Through this shared
approach, we anticipate approximately $150 million in annual
synergies.”
“We remain highly impressed by the tremendous depth of talent
and resources embedded within RPC, and are looking forward to the
opportunity to strengthen our combined platform with the wealth of
experience and expertise this team has to offer. We believe this
acquisition will further enhance the long-term outlook for our
business and will provide a unique value creation opportunity for
our shareholders,” stated Salmon.
The acquisition of RPC was financed with a portion of the
proceeds of (i) Berry’s May 2019 sale of $1.25 billion of 4.875%
first priority senior secured notes due 2026 and $500 million of
5.625% second priority senior secured notes due 2026 and (ii) a
$4.25 billion incremental term loan and a €1.075 billion
incremental term loan, which also served to refinance an existing
Berry term loan.
Berry is scheduled to announce its third fiscal quarter earnings
on August 7, 2019, and will provide an update on its progress at
that time.
Goldman Sachs International, Wells Fargo Securities, and J.P.
Morgan Securities acted as financial advisors and Freshfields,
Bruckhaus Deringer LLP and Bryan Cave Leighton Paisner LLP acted as
legal advisors for Berry.
About Berry
Berry Global Group, Inc. (NYSE:BERY), headquartered in
Evansville, Indiana, is committed to its mission of ‘Always
Advancing to Protect What’s Important,’ and proudly partners with
its customers to provide them with value-added protective solutions
that are increasingly light-weighted and easier to recycle or
reuse. The company is a leading global supplier of a broad range of
innovative rigid, flexible, and non-woven products used every day
within consumer and industrial end markets. Berry, a Fortune 500
company, has over 48,000 employees and generated approximately $13
billion of sales in fiscal year 2018 on a combined pro forma basis
from operations that span over 290 locations on six continents. For
additional information, visit Berry’s website at
berryglobal.com.
Combined Pro Forma Information
RPC is a public limited company incorporated under the laws of
England and Wales that provides public financial statements
semi-annually. RPC has not reported historical financial statements
for any periods subsequent to the six-month period ended September
30, 2018. RPC’s historical financial statements were prepared in
accordance with International Financial Standards as adopted by the
European Union (“IFRS”), which differ from generally accepted
accounting principles in the United States (“GAAP”). Berry has made
various adjustments to reflect known IFRS to GAAP differences and
to translate RPC’s financial statements from British Pounds to U.S.
dollars based upon applicable historical exchange rates, which may
differ materially from future exchange rates. No assurance can be
given that there will not be differences between the pro forma
financial information included herein and the pro forma financial
statements that Berry will be required to file with the Securities
and Exchange Commission (the “SEC”) or that such differences will
not be material. For further information, see Exhibit 99.2 to
Berry’s Form 8 K filed with the SEC on May 15, 2019.
Forward-Looking Statements
Statements in this release that are not historical, including
statements relating to the expected future performance of the
Company, are considered “forward looking” and are presented
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. You can identify forward-looking
statements because they contain words such as “believes,”
“expects,” “may,” “will,” “should,” “would,” “could,” “seeks,”
“approximately,” “intends,” “plans,” “estimates,” “anticipates,”
“outlook,” or “looking forward,” or similar expressions that relate
to our strategy, plans, or intentions. All statements we make
relating to our estimated and projected earnings, margins, costs,
expenditures, cash flows, growth rates, and financial results or to
our expectations regarding future industry trends are
forward-looking statements. In addition, we, through our senior
management team, from time to time make forward-looking public
statements concerning our expected future operations and
performance and other developments. These forward-looking
statements are subject to risks and uncertainties that may change
at any time, and, therefore, our actual results may differ
materially from those that we expected.
Important factors that could cause actual results to differ
materially from our expectations, which we refer to as cautionary
statements, are disclosed under “Risk Factors” and elsewhere in our
Annual Report on Form 10-K and subsequent filings with the SEC,
including, without limitation, in conjunction with the
forward-looking statements included in this release. All
forward-looking information and subsequent written and oral
forward-looking statements attributable to us, or to persons acting
on our behalf, are expressly qualified in their entirety by the
cautionary statements. Some of the factors that we believe could
affect our results include: (1) changes in prices and availability
of resin and other raw materials and our ability to pass on changes
in raw material prices on a timely basis; (2) performance of our
business and future operating results; (3) risks related to
acquisitions and integration of acquired businesses; (4) potential
failure to realize the intended benefits from recent acquisitions
and the acquisition of RPC, including, without limitation, the
inability to realize the anticipated cost synergies in the
anticipated amounts or within the contemplated timeframes or cost
expectations, the inability to realize the anticipated revenues,
expenses, earnings and other financial results, and growth and
expansion of our operations, and the anticipated tax treatment; (5)
risks associated with our substantial indebtedness and debt
service; (6) risks related to international business, including
foreign currency exchange rate risk and the risks of compliance
with applicable export controls, sanctions, anti-corruption laws
and regulations; (7) risks of competition, including foreign
competition, in our existing and future markets; (8) uncertainty
regarding the United Kingdom’s withdrawal from the European Union
and the outcome of future arrangements between the United Kingdom
and the European Union; (9) risks related to the phase-out of the
London Interbank Offered Rate (LIBOR), or the replacement of LIBOR
with a different reference rate or modification of the method used
to calculate LIBOR; and (10) the other factors discussed under the
heading “Risk Factors” in our Annual Report on Form 10-K and
subsequent filings with the SEC. We caution you that the foregoing
list of important factors may not contain all of the material
factors that are important to you. Accordingly, readers should not
place undue reliance on those statements. All forward-looking
statements are based upon information available to us on the date
of this release. We undertake no obligation to publicly update or
revise any forward-looking statement as a result of new
information, future events or otherwise, except as otherwise
required by law
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190701005316/en/
Investors:Dustin Stilwell 1+812.306.2964
ir@berryglobal.com
Media: Eva Schmitz 1+812.306.2424
evaschmitz@berryglobal.com
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