Ardagh is moving ahead with a long-promised initial public offering of its metal container business, Oressa
The privately-held packaging company, which has suggested it will go public, will use proceeds from the offering to reduce debt following a series of acquisitions.
Ardagh hopes to raise 2bn (US$2.23bn) from the IPO of the unit and a related debt financing, the company said recently.
A preliminary registration statement filed with the SEC did not provide specific details on the financing, only outlining a $100m offering as a placeholder. Because of its size the offering will need to go through a full regulatory review, suggesting an IPO is unlikely until late 2015.
Citigroup, the primary bookrunner on Ardagh’s previous bond deals, is mandated as sole bookrunning manager on the Oressa IPO.
Oressa, the canning unit, generated adjusted Ebitda of 246m on revenue of 1.85bn in 2014, with 85% of revenue from Europe. Net debt at the end of 2014 totalled 1.48bn, according to information contained the IPO prospectus.
The Oressa IPO marks a significant turn from a string of acquisitions that has seen Ardagh raise billions of dollars through high-yield bonds.
In 2012, it bought Anchor Glass and indicated at the time that it would focus on an IPO – in 2010 alone it spent 8.7m in “aborted IPO costs”. Instead the company agreed to purchase the North American glass container of Saint-Gobain, Verallia North America (VNA), later that year that it would fund with nearly US$1.6bn-equivalent debt package.
More recently Ardagh contemplated a potential bid for Saint Gobain’s European glass unit, Verallia, leading to concerns among creditors, particularly holders of its deeply subordinated PIK bonds. Apollo Global Management emerged as the winning bidder for that business.