Ardagh chairman not the retiring type as he eyes further growth

Cantillon: Dubliner Paul Coulson not ready to end his adventure despite nearing 65

Paul Coulson: finding chunky deals to continue the group’s 36 per cent compound annual earnings growth will not be easy. Photograph: Alan Betson

Paul Coulson: finding chunky deals to continue the group’s 36 per cent compound annual earnings growth will not be easy. Photograph: Alan Betson

 

Paul Coulson may be about to celebrate his 65th birthday at the end of this month, but retirement is the last thing on the Ardagh Group chairman’s mind.

The Dublin-born financier made it clear to anyone who would listen last month, ahead of the flotation on the New York Stock Exchange of the metal and glass container giant, that he is going nowhere soon and has no plans to sell down his own shares.

His stake is known to be about 33 per cent between direct and indirect holdings and currently worth about $1.64 billion (€1.55 billion).

Ardagh is one of the biggest “roll-up” investment stories ever executed by an Irish businessman, having carried out 23 acquisitions since he first became involved in the company in 1998. Back then revenues at the firm were just over €50 million. They’re expected to reach about €7.8 billion this year, helped by its transformative purchase of a beverage cans business last year from rivals Ball Corp and Rexam.

Deleveraging mode

Coulson, who continued to tap high-yielding debt markets to fund ever-larger acquisitions as the State and its citizens were going through a financial crash diet during the crisis, is currently in deleveraging mode. Analysts at Goldman Sachs see the group cutting its net debt by the end of next year to €6.3 billion, or 4.4 times operating earnings, from €7.3 billion, or 5.4 times, in December.

Coulson has also signalled that the company is taking a bit of a breather on the acquisitions front, although he knows that this is ultimately the only way to expand, as making food cans and beer bottles is hardly a massive growth area.

“We believe that the bull case for earnings to outgrow the sector largely rests on Ardagh’s ability to continue to successfully execute on mergers and acquisitions,” Goldman Sachs said in a note to clients this week.

Coulson said on March 16th, when he rang the opening bell on the New York Stock Exchange as Ardagh shares started to trade, that he is only halfway through a “phenomenal adventure”. But finding chunky deals to continue the group’s 36 per cent compound annual earnings growth over the past decade is going to prove more difficult.

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