A multi-billion dollar deal sees Paul Coulson’s Ardagh Group on an expansion path as the glass and metal packaging firm acquires new facilities.
In April, Paul Coulson’s Luxembourg-based glass and metal packaging company Ardagh Group sealed a €3.42bn deal with Ball Corporation and Rexam Plc to buy a series of beverage can manufacturing plants and support facilities in Europe, Brazil and the US.
It is expected to close by the end of June, once Ball acquires Rexam, and will be financed with cash along with secured and unsecured debt. Ardagh will emerge as the world’s third-largest can manufacturer, second-largest in Europe, and third-largest in the US and Brazil.
“We are pleased to expand our consumer packaging business with the addition of a leading beverage can business. Whilst we do not currently operate in the beverage can market, the business we are acquiring is highly complementary to our existing metal and glass businesses. The acquired business has an excellent management team and strong customer relationships.”
The deal encompasses 10 can manufacturing plants and two endplants in Europe; seven manufacturing plants and one endplant in the US; two plants in Brazil; and support facilities in Germany, the UK, Switzerland and the US. Last year the portfolio generated sales of €4bn and EBITDA of $400m.
DOLLARS AND CENTS
The group subsequently announced details of a bond issue amidst financing arrangements of $4.5bn.
“Ardagh is delighted with the huge support which it has received from both longstanding and new debt investors in this upsized bond issue,” explained Coulson. “We have secured financing for our strategic acquisition of the beverage can business at a blended interest rate of 4.9%.”
The group has also refinanced US$1.5bn of its existing unsecured debt at significantly lower interest rates, generating annual interest savings of over US$30m and extending debt maturities from 2020 to 2024.”
In tandem with the acquisition announcement, Ardagh also announced that Ian Curley will become CEO-designate in June, replacing outgoing CEO Niall Wall, who served for 10 years, in September. Curley was formerly CFO of Smurfit Kappa Group from 2000 until his departure earlier this year.
Throughout its long and successful history Ardagh has expanded by acquiring a number of global companies such as Rockware Glass and Rexam Glass Division. In 2011, Ardagh Group bought the metal packaging company Impress Group for €1.7bn and acquired Fi Par in March 2011 for €125m. A year later the company acquired Anchor Glass in a deal estimated to be in the region of $880m, and in 2013, the Group acquired St-Gobain’s Verallia North America.
Earlier this year Ardagh announced the investment of €2.4m in a state-of-the-art warehouse in Deventer, the Netherlands. Employing fully automated forklift trucks – or automated guided vehicles – they operate via software in a warehouse without lights.
The facility is at the group’s existing metal production facility on-site. As it enters summer, Ardagh Group totals 100 facilities in 22 countries, with sales of $8.8bn and an employee roster of 23,000 people – backed, as ever, by the drive and vision of Paul Coulson.
- A TCD graduate, Ardagh chairman Paul Coulson qualified as an accountant with PwC, founded Bates Coulson & Co, entered aviation leasing and set up Yeoman International Group in 1982.
- He took over the former Irish Glass Bottle Company in 1998, setting off on a lengthy series of expansions and acquisitions that continues to the present day, and closed its landmark Ringsend plant in 2002.