By Rhiannon Hoyle
Australian packaging company Orora on Tuesday said it will buy French high-end glass bottle maker Saverglass from private-equity firm Carlyle Group in a deal valued around 2.16 billion Australian dollars (US$1.40 billion).
Orora said Saverglass, which designs and makes bottles for premium spirit and wine markets, will become the centerpiece of its glass business, expanding its footprint outside Australia and boosting opportunities for growth. The company will raise roughly A$1.35 billion to help fund the acquisition.
“This strategic acquisition further strengthens our existing glass business, establishing Orora as a global player of scale in attractive premium segments,” said Chief Executive Brian Lowe.
Saverglass has a 33% market share in high-end spirits bottles globally, with its biggest sales markets in France and the Americas, Orora said in an investor presentation. It makes bottles for brands including Grey Goose vodka and has an average relationship span of 15 years with its top 20 customers, Orora added.
The Australian company said the fully underwritten equity raising comprises a A$450 million institutional placement and a A$895 million 1-for-2.55 accelerated non-renounceable pro rata entitlement offer. The company has also agreed to A$875 million of acquisition debt financing, it said.
The acquisition is expected to be mid-single-digit earnings-per-share accretive in the first full fiscal year of ownership, according to Orora.
“From a commercial, product and geographic perspective the combination of Saverglass and Orora is expected to unlock significant value creation opportunities for the combined group,” it said.
Orora also projected A$15 million in near-term cost benefits from joining the businesses.
Carlyle Group, which acquired Saverglass in 2016, couldn’t immediately be reached for comment.
Saverglass Chief Executive Jean-Marc Arrambourg–who will head a new division that will include Saverglass and Orora’s Gawler operation–said he will seek to “consolidate and accelerate” momentum in the business.
“We see Orora as a natural owner of Saverglass, given the high complementarity of the two businesses and significant benefits to be realized from the combined global network and capabilities,” he said.
Orora recently said it expects profits to rise in the year ahead, after its beverage business in Australasia delivered double-digit revenue growth last fiscal year, supported by higher can volumes. Glass volumes were softer, however, due to lower commercial wine volumes.
Write to Rhiannon Hoyle at [email protected]
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