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Berry Global has announced the sale of its Specialty Tapes business to Nautic Partners for approximately $540 million. This divestment aligns with Berry’s strategy to focus on consumer-oriented markets. The company plans to use the proceeds to reduce debt. Combined with the cash from the HHNF spin-off, the total proceeds of $1.3 billion will reduce Berry’s pro forma net debt to $5.9 billion.
This announcement follows Berry’s recent agreement to combine with Amcor in an all-stock transaction. The combined entity is projected to generate $23.6 billion in revenue and $4.3 billion in EBITDA, with an 18% margin. The transaction is expected to complete by first half of 2025.
Berry Global ha annunciato la vendita della sua divisione nastro speciali a Nautic Partners per circa 540 milioni di dollari. Questa dismissione si allinea con la strategia di Berry di concentrarsi sui mercati orientati ai consumatori. L’azienda prevede di utilizzare i proventi per ridurre il debito. Combinati con il contante derivante dallo spin-off di HHNF, i proventi totali di 1,3 miliardi di dollari ridurranno il debito netto pro forma di Berry a 5,9 miliardi di dollari.
Questo annuncio segue l’accordo recente di Berry per unirsi ad Amcor in una transazione completamente azionaria. L’entità combinata dovrebbe generare 23,6 miliardi di dollari di ricavi e 4,3 miliardi di dollari di EBITDA, con un margine del 18%. Si prevede che la transazione si completi entro la prima metà del 2025.
Berry Global ha anunciado la venta de su negocio de cintas especiales a Nautic Partners por aproximadamente 540 millones de dólares. Esta desinversión está alineada con la estrategia de Berry de enfocarse en mercados orientados al consumidor. La compañía planea utilizar los ingresos para reducir la deuda. Combinando esto con el efectivo de la escisión de HHNF, los ingresos totales de 1.3 mil millones de dólares reducirán la deuda neta pro forma de Berry a 5.9 mil millones de dólares.
Este anuncio sigue a la reciente acuerdo de Berry para fusionarse con Amcor en una transacción completamente en acciones. La entidad combinada se proyecta generará 23.6 mil millones de dólares en ingresos y 4.3 mil millones de dólares en EBITDA, con un margen del 18%. Se espera que la transacción se complete en la primera mitad de 2025.
베리 글로벌은 전문 테이프 사업부를 노틱 파트너스에 약5억 4천만 달러에 매각한다고 발표했습니다. 이 매각은 소비자 시장에 집중하려는 베리의 전략과 일치합니다. 회사는 매각 대금을 부채 상환에 사용할 계획입니다. HHNF 분할을 통해 얻는 현금을 더하면 총 13억 달러의 수익이 베리의 프로 포르마 순 부채를 59억 달러로 줄이는 데 기여할 것입니다.
이번 발표는 베리와 암코르가 전량 주식 거래로 합병하기로 한 최근 합의에 이어 나온 것입니다. 결합된 법인은 236억 달러의 수익과 43억 달러의 EBITDA를 창출할 것으로 예상되며, 18%의 마진을 기록할 것으로 보입니다. 거래는 2025년 상반기까지 완료될 것으로 예상됩니다.
Berry Global a annoncé la vente de sa division de rubans spéciaux à Nautic Partners pour environ 540 millions de dollars. Cette désinvestissement est en adéquation avec la stratégie de Berry de se concentrer sur les marchés axés sur le consommateur. L’entreprise prévoit d’utiliser les bénéfices pour réduire sa dette. Combiné avec les liquidités provenant de la scission de HHNF, les recettes totales de 1,3 milliard de dollars réduiront la dette nette pro forma de Berry à 5,9 milliards de dollars.
Cette annonce suit l’accord récent de Berry pour se combiner avec Amcor dans une transaction entièrement en actions. L’entité combinée devrait générer 23,6 milliards de dollars de revenus et 4,3 milliards de dollars d’EBITDA, avec une marge de 18 %. La transaction devrait être finalisée d’ici la première moitié de 2025.
Berry Global hat den Verkauf seines Spezialklebebänder Geschäfts an Nautic Partners für etwa 540 Millionen Dollar angekündigt. Diese Abspaltung steht im Einklang mit berrys Strategie, sich auf verbraucherorientierte Märkte zu konzentrieren. Das Unternehmen plant, die Erlöse zur Reduzierung seiner Schulden zu verwenden. Zusammen mit dem Bargeld aus der HHNF-Abspaltung werden die Gesamterlöse von 1,3 Milliarden Dollar die pro forma Nettoverschuldung von Berry auf 5,9 Milliarden Dollar senken.
Diese Ankündigung erfolgt nach berrys kürzlichem Vertrag zur Fusion mit Amcor in einer reinen Aktientransaktion. Die kombinierte Einheit wird voraussichtlich 23,6 Milliarden Dollar Umsatz und 4,3 Milliarden Dollar EBITDA bei einer Marge von 18 % generieren. Der Abschluss der Transaktion wird bis zur ersten Jahreshälfte 2025 erwartet.
Positive
- Sale of Specialty Tapes business for $540 million
- Debt reduction with combined proceeds of $1.3 billion from Tapes sale and HHNF spin-off
- Pro forma net leverage remains stable at 3.5x
- Strategic alignment towards higher-growth consumer markets
Negative
- Reduction in total revenue from $12.3B to $9.7B post-divestment
- EBITDA decrease from $2.0B to $1.7B following the transaction
Insights
The $540 million sale of Berry’s Specialty Tapes business to Nautic Partners represents a strategic move to optimize the company’s portfolio. This transaction, combined with the earlier HHNF spin-off, will generate total proceeds of $1.3 billion, significantly improving Berry’s financial position by reducing net debt to $5.9 billion and maintaining a healthy 3.5x leverage ratio.
The divestiture aligns perfectly with Berry’s pending merger with Amcor, creating a $23.6 billion revenue powerhouse in consumer packaging. The combined entity’s projected EBITDA of $4.3 billion with an impressive 18% margin demonstrates strong operational efficiency. Expected synergies of $530 million in cost savings and $280 million in growth opportunities by year 3 suggest substantial value creation potential.
This strategic divestiture marks Berry’s decisive shift toward consumer-focused markets, which typically offer more stable growth and higher margins than industrial segments. The timing is particularly strategic, occurring alongside the transformative Amcor merger. The combined entity will benefit from enhanced scale, broader product offerings and strengthened innovation capabilities, particularly in sustainable packaging solutions.
The deal’s structure demonstrates careful consideration of shareholder value, with proceeds earmarked for debt reduction. The retention of an 18% EBITDA margin post-divestiture indicates the core business remains robust, while the expanded R&D investment of $180 million positions the company well for future growth in consumer packaging markets.
Aligned with Berry’s strategy to transition the portfolio toward consumer-focused end markets
EVANSVILLE, Ind.–(BUSINESS WIRE)– Berry Global Group, Inc., (“Berry”) (NYSE:BERY) announced today it has entered into a definitive agreement to sell its Specialty Tapes business (“Tapes”) to the private equity firm Nautic Partners, LLC (“Nautic”) for a headline purchase price of approximately $540 million, which is subject to a number of closing adjustments.
The Tapes business is a franchise highly valued by its industrial customers. As a result, this separation is aligned with Berry’s broader strategy to transition the portfolio towards more consistent, higher growth consumer-oriented end markets and platforms.
Berry plans to use proceeds from the transaction to pay down outstanding debt at Berry. Adjusted for both the cash distribution received in November 2024 on close of Berry’s Health, Hygiene and Specialties Global Nonwovens and Films business (“HHNF”) spin-off, and the net cash proceeds1 expected on the sale of Tapes, totaling $1.3 billion, Berry’s pro forma net debt as of September 30, 2024 was approximately $5.9 billion (3.5x LTM net leverage).
|
as of 30-Sep | US$ in bn |
Berry (as Reported) |
HHNF and Tapes |
Berry (Pro Forma) |
|
Debt |
$ 8.3 |
|
$ 8.3 |
|
Cash & Equivalents / Proceeds |
(1.1) |
(1.3) |
(2.4) |
|
Net Debt |
$ 7.2 |
$(1.3) |
$ 5.9 |
|
EBITDA |
2.0 |
(0.3) |
1.7 |
|
Net Leverage |
3.5 x |
|
3.5 x |
|
Revenue |
$ 12.3 |
$ 2.6 |
$ 9.7 |
The transaction is expected to complete by the first half of calendar 2025, subject to customary closing conditions.
Berry CEO, Kevin Kwilinski, said, “Over the past year, Berry has undergone a significant transformation, completing the spin-off of our HHNF business, enhancing our product mix and optimizing our portfolio. The sale of Tapes further supports these efforts and the continued focus on our high-growth consumer portfolio.”
Goldman Sachs & Co. LLC is serving as exclusive financial advisor to Berry, and Bryan Cave Leighton Paisner LLP is serving as Berry’s legal counsel. McDermott, Will & Emery LLP is serving as Nautic’s legal counsel and Santander is serving as exclusive financial advisor to Nautic.
Berry’s Announced Combination with Amcor
On November 19, 2024, Berry announced an agreement to combine with Amcor in an all-stock transaction, creating a global leader in consumer and healthcare packaging solutions.
The combination brings together two highly complementary businesses to create a global leader in consumer packaging solutions, with a broader flexible film and converted film offering for customers, a scaled containers and closures business, and a unique global healthcare portfolio. The combined company will have unprecedented innovation capabilities and scale and be uniquely positioned to accelerate growth, solve customers’ and consumers’ sustainability needs, unlock further portfolio transformation, and deliver significant value to both sets of shareholders.
| ________________________________ |
|
1 Reflects management estimates for expected cash proceeds net of taxes of $400 million. |
The sale of the Tapes business further reinforces the strategic rationale for the combination and has no material impact on the financial profile of the combined entity as detailed below6:
| Combined LTM 30-Sep-2024 | Amcor | Berry | (+)Synergies2 | Combined |
|
Revenue ($ in billions) |
$13.6 |
$9.7 |
$0.3 |
$23.6 |
|
EBITDA |
$2.0 |
$1.7 |
$0.6 |
$4.3 |
|
% Margin |
15% |
18% |
– |
18% |
|
R&D Investment |
$100 |
$80 |
– |
$180 |
| ________________________________ |
|
2 Includes run-rate synergies by the end of year 3. Includes $530 million in run-rate cost synergies and $60 million earnings impact from $280 million in incremental growth synergies. $280 million in growth synergies expected to build to $400+ million by year 4. 3 Cash flow and Adj. Cash EPS include $60 million in additional financial synergies by year 3. 4 Defined as combined operating cash flow including run-rate synergies, after interest and tax, before capital expenditures. 5 Accretion inclusive of run-rate impact of synergies and is relative to Amcor’s LTM 30-Sep-2024 standalone EPS. 6 Excludes the HHNF transaction and the sale of Tapes. |
Further details relating to the compelling rationale for this combination can be found at https://ir.berryglobal.com/financials under recent events.
About Berry Global
Berry is a global leader in innovative packaging solutions that we believe make life better for people and the planet. We do this every day by leveraging our unmatched global capabilities, sustainability leadership, and deep innovation expertise to serve customers of all sizes around the world. Harnessing the strength in our diversity and industry-leading talent of over 34,000 global employees across more than 200 locations, we partner with customers to develop, design, and manufacture innovative products with an eye toward the circular economy. The challenges we solve and the innovations we pioneer benefit our customers at every stage of their journey.
About Nautic Partners
Nautic Partners is a Providence, Rhode Island-based middle-market private equity firm that focuses its expertise and market knowledge on sub-verticals within three sectors: Healthcare, Industrials and Services. Nautic has completed over 155 platform transactions throughout its 38-year history. In pursuing its thematic and proactive investment strategy, Nautic seeks to partner with executives and management teams in an effort to accelerate the growth trajectory of its portfolio companies via acquisitions, targeted operating initiatives, and increased management team depth. For more information, please visit www.nautic.com.
Important Information for Investors and Shareholders
This communication does not constitute an offer to sell or the solicitation of an offer to buy or exchange any securities or a solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. It does not constitute a prospectus or prospectus equivalent document. No offering or sale of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the US Securities Act of 1933, as amended, and otherwise in accordance with applicable law.
In connection with the proposed transaction between Berry Global Group, Inc. (“Berry”) and Amcor plc (“Amcor”), Berry and Amcor intend to file relevant materials with the Securities and Exchange Commission (the “SEC”), including, among other filings, an Amcor registration statement on Form S-4 that will include a joint proxy statement of Berry and Amcor that also constitutes a prospectus of Amcor with respect to Amcor’s ordinary shares to be issued in the proposed transaction, and a definitive joint proxy statement/prospectus, which will be mailed to shareholders of Berry and Amcor (the “Joint Proxy Statement/Prospectus”). Berry and Amcor may also file other documents with the SEC regarding the proposed transaction. This document is not a substitute for the Joint Proxy Statement/Prospectus or any other document which Berry or Amcor may file with the SEC. INVESTORS AND SECURITY HOLDERS OF BERRY AND AMCOR ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER DOCUMENTS THAT WILL BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND RELATED MATTERS. Investors and security holders will be able to obtain free copies of the registration statement and the Joint Proxy Statement/Prospectus (when available) and other documents filed with the SEC by Berry or Amcor through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with the SEC by Berry will be available free of charge on Berry’s website at berryglobal.com under the tab “Investors” and under the heading “Financials” and subheading “SEC Filings.” Copies of the documents filed with the SEC by Amcor will be available free of charge on Amcor’s website at amcor.com under the tab “Investors” and under the heading “Financial Information” and subheading “SEC Filings.”
Certain Information Regarding Participants
Berry, Amcor and their respective directors and executive officers may be considered participants in the solicitation of proxies from the shareholders of Berry and Amcor in connection with the proposed transaction. Information about the directors and executive officers of Berry is set forth in its Annual Report on Form 10-K for the year ended September 30, 2023, which was filed with the SEC on November 17, 2023, its proxy statement for its 2024 annual meeting, which was filed with the SEC on January 4, 2024, and its Current Reports on Form 8-K, which were filed with the SEC on February 12, 2024, April 11, 2024, September 6, 2024 and November 4, 2024. Information about the directors and executive officers of Amcor is set forth in its Annual Report on Form 10-K for the year ended June 30, 2024, which was filed with the SEC on August 16, 2024 and its proxy statement for its 2024 annual meeting, which was filed with the SEC on September 24, 2024. To the extent holdings of Berry’s or Amcor’s securities by its directors or executive officers have changed since the amounts set forth in such filings, such changes have been or will be reflected on Initial Statements of Beneficial Ownership on Form 3 or Statements of Beneficial Ownership on Form 4 filed with the SEC. Information about the directors and executive officers of Berry and Amcor, including a description of their direct or indirect interests, by security holdings or otherwise, and other information regarding the potential participants in the proxy solicitations, which may be different than those of Berry’s stockholders and Amcor’s shareholders generally, will be contained in the Joint Proxy Statement/Prospectus and other relevant materials to be filed with the SEC regarding the proposed transaction. You may obtain these documents (when they become available) free of charge through the website maintained by the SEC at http://www.sec.gov and from Berry’s or Amcor’s website as described above.
Cautionary Statement Regarding Forward-Looking Statements
This communication contains certain statements that are “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Some of these forward-looking statements can be identified by words like “anticipate,” “approximately,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “outlook,” “plan,” “potential,” “possible,” “predict,” “project,” “target,” “seek,” “should,” “will,” or “would,” the negative of these words, other terms of similar meaning or the use of future dates. Such statements, including projections as to the anticipated benefits of the proposed transactions, the impact of the proposed disposition of Tapes (the “Tapes Transaction”) on Berry and Amcor’s business and future financial and operating results and prospects, the amount and timing of synergies from the Berry and Amcor proposed transaction (the “Combination Transaction”), the estimated amount of net proceeds to be received in the Tape Transaction, after giving effect to a number of closing adjustments, the terms and scope of the expected financing in connection with the proposed Combination Transaction, the aggregate amount of indebtedness of Berry following the proposed Tapes Transaction and the combined company following the closing of the proposed Combination Transaction and the closing date for the proposed transactions, are based on the current estimates, assumptions and projections of the management of Berry with respect to the proposed Tapes Transaction, and Berry and Amcor with respect to the proposed Combination Transaction, and are qualified by the inherent risks and uncertainties surrounding future expectations generally, all of which are subject to change. Actual results could differ materially from those currently anticipated due to a number of risks and uncertainties, many of which are beyond Berry’s control with respect to the proposed Tapes Transaction and Amcor’s and Berry’s control with respect to the proposed Combination Transaction. None of Berry, Amcor or any of their respective directors, executive officers, or advisors, provide any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements will actually occur, or if any of them do occur, what impact they will have on the business, results of operations or financial condition of Berry or Amcor. Should any risks and uncertainties develop into actual events, these developments could have a material adverse effect on Berry’s and Amcor’s businesses, the proposed Tape Transaction, the proposed Combination Transaction and the ability to successfully complete the proposed transactions and realize their respective expected benefits. Risks and uncertainties that could cause results to differ from expectations include, but are not limited to, the occurrence of any event, change or other circumstance that could give rise to the termination of the definitive transaction agreements for each transaction; the risk that the conditions to the completion of the proposed transactions (including shareholder approval in the case of the proposed Combination Transaction and regulatory approvals for both proposed transactions) are not satisfied in a timely manner or at all; the risks arising from the integration of the Berry and Amcor businesses in the proposed Combination Transaction; the risk that the anticipated benefits of each of the proposed transactions may not be realized when expected or at all; the risk of unexpected costs or expenses resulting from each of the proposed transactions; the risk of litigation related to the proposed Combination Transaction; the risks related to disruption of management’s time from ongoing business operations as a result of each of the proposed transactions; the risk that the proposed Combination Transaction may have an adverse effect on the ability of Berry and Amcor to retain key personnel and customers; general economic, market and social developments and conditions; the evolving legal, regulatory and tax regimes under which Berry and Amcor operate; potential business uncertainty, including changes to existing business relationships, during the pendency of the proposed transaction that could affect Berry’s and/or Amcor’s financial performance; and other risks and uncertainties identified from time to time in Berry’s and Amcor’s respective filings with the SEC, including the Joint Proxy Statement/Prospectus to be filed with the SEC in connection with the proposed Combination Transaction. While the list of risks presented here for both prospective transactions is, and the list of risks presented in the Joint Proxy Statement/Prospectus for the Combination Transaction will be, considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties, and other risks may present significant additional obstacles to the realization of forward-looking statements. Forward-looking statements included herein are made only as of the date hereof and neither Berry nor Amcor undertakes any obligation to update any forward-looking statements, or any other information in this communication, as a result of new information, future developments or otherwise, or to correct any inaccuracies or omissions in them which become apparent. All forward-looking statements in this communication are qualified in their entirety by this cautionary statement.
Note Regarding Use of Non-GAAP Financial Measures
In addition to the financial measures presented in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), this communication includes certain non-GAAP financial measures (collectively, the “Non-GAAP Measures”), such as EBITDA. These Non-GAAP Measures should not be used in isolation or as a substitute or alternative to results determined in accordance with U.S. GAAP. In addition, Berry’s and Amcor’s definitions of these Non-GAAP Measures may not be comparable to similarly titled non-GAAP financial measures reported by other companies. It should also be noted that projected financial information for the pro forma results of Berry following the disposition of Tapes and the combined businesses of Berry and Amcor following completion of the Combination Transaction is based on management’s estimates, assumptions and projections and has not been prepared in conformance with the applicable accounting requirements of Regulation S-X relating to pro forma financial information, and the required pro forma adjustments have not been applied and are not reflected therein. These measures are provided for illustrative purposes, are based on an arithmetic sum of the relevant historical financial measures of Berry and Amcor and do not reflect pro forma adjustments. None of this information should be considered in isolation from, or as a substitute for, the historical financial statements of Berry or Amcor. Important risk factors could cause actual future results and other future events to differ materially from those currently estimated by management, including, but not limited to, the risks that: a condition to the closing of either of the proposed transactions may not be satisfied; a regulatory approval that may be required for either of the proposed transactions is delayed, is not obtained or is obtained subject to conditions that are not anticipated; with respect to the proposed Combination Transaction: management’s time and attention is diverted on transaction related issues; disruption from the proposed transactions makes it more difficult to maintain business, contractual and operational relationships; the credit ratings of the combined company declines following either of the proposed transaction; legal proceedings are instituted against Berry, Amcor or the combined company; Berry, Amcor or the combined company is unable to retain key personnel; and the announcement or the consummation of either of the proposed transaction has a negative effect on the market price of the capital stock of Berry and Amcor or on Berry’s and Amcor’s operating results.
View source version on businesswire.com: https://www.businesswire.com/news/home/20241125222548/en/
Dustin Stilwell
VP, Head of Investor Relations
+1 (812) 306 2964
Source: Berry Global Group, Inc.
FAQ
What is the sale price of Berry Global’s (BERY) Specialty Tapes business?
Berry Global (BERY) is selling its Specialty Tapes business to Nautic Partners for approximately $540 million.
When is Berry Global’s (BERY) Specialty Tapes sale expected to close?
The transaction is expected to complete by the first half of calendar 2025, subject to customary closing conditions.
How will Berry Global (BERY) use the proceeds from the Specialty Tapes sale?
Berry Global plans to use the proceeds from the Specialty Tapes sale to pay down outstanding debt.
What will be Berry Global’s (BERY) pro forma net debt after the Tapes sale and HHNF spin-off?
Berry Global’s pro forma net debt will be approximately $5.9 billion after receiving $1.3 billion in combined proceeds from both transactions.
