The transaction is subject to US regulatory approval and other customary closing conditions and is expected to close at the end of August 2012.
Anchor, which is headquartered in Tampa, Florida, is a technologically advanced manufacturer of glass containers serving the North American food and beverage industries. Anchor is the third largest glass container manufacturer in the US. It produces approximately 5.6 billion containers annually from its eight facilities located in the United States and employs approximately 2,700 people. Anchor has annual revenues of approximately US $800 million (€ 656 million).
Paul Coulson, Ardagh Chairman, commented:
“The acquisition of Anchor will increase the size of our glass business by almost 50% and is a very significant step in developing our operations in the US. It will result in approximately 25% of Ardagh’s EBITDA being generated in the US. The transaction is an important milestone in the evolution of Ardagh as it will add scale and value to our global packaging franchise.”
Niall Wall, Ardagh Group CEO, added:
"This transaction is very significant in the globalisation of Ardagh’s glass business and follows on from the recent acquisition of Leone Industries in New Jersey. Anchor is a technologically advanced business which has developed and manufactured an array of award-winning products for a range of household names in the food and beverage industries. We are delighted with the transaction as it places Ardagh in a leading position in the US glass industry with an approximate 23% market share.”
Eugene Davis, Chairman of Anchor’s Board of Directors, stated:
"The acquisition of Anchor by Ardagh represents a great day for our company. Operating as part of Ardagh will allow Anchor to accelerate its growth plans and offer a global capability to our customers. Wayzata Investment Partners led Anchor through its restructuring, turnaround and a period of record earnings growth, but the majority of the credit goes to the outstanding team at Anchor."
Ardagh also announced that it will raise US $920 million equivalent of debt financing through the issue of US $700 million equivalent of senior secured notes due 2017 (part in euro and part in US dollars) and US $220 million senior notes due 2020. The net proceeds from the issuance and sale of the notes will be used to pay the purchase price (including costs) for the acquisition and to refinance substantially all of the existing indebtedness of Anchor.
Ardagh 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.
Ardagh Trading Update
Ardagh’s expectations regarding operating and financial performance in the second quarter of 2012 (which are currently based on internal management estimates and are subject to confirmation in the quarterly report for the quarter) are as follows:
Revenues for the quarter ending June 30, 2012 are expected to be slightly ahead of the same period in 2011 with increased glass selling prices and contributions from new acquisitions being offset by adverse volumes in Ardagh’s Metal, Glass (to a lesser extent) and Engineering (primarily timing differences) businesses.
EBITDA for the quarter ending June 30, 2012 compared to the same period in 2011 is expected to be lower by a mid-to-high single digit percentage. This is mainly due to reduced metal and glass container volumes, lower engineering volumes (primarily timing in nature), 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.
Despite a generally difficult trading environment, Ardagh expects materially stronger operating cash flow generation in the quarter ending June 30, 2012 compared to the same period in 2011.
About Ardagh Group S.A.
Ardagh Group, based in Luxembourg, is a global leader in rigid packaging solutions, producing metal and glass packaging for most of the world's leading food, beverage and consumer care brands. Post completion of this transaction, it will operate 100 facilities in 25 countries, employ 17,700 people and have global sales exceeding €4.1 billion. Ardagh’s customers include: AB InBev, Heineken, Diageo, Pernod Ricard, Bacardi Martini, Heinz, Nestle, Danone, Unilever, Procter and Gamble, L’Oreal, Snapple, Coca Cola, Del Monte and many more international brands.
Citi acted as financial adviser to Ardagh and provided committed financing for the acquisition. Shearman & Sterling LLP acted as legal counsel to Ardagh.
Jefferies & Company Inc. as financial adviser, and Akin Gump Strauss Hauer & Feld LLP as legal counsel, acted for Anchor.