VNA is latest in line of shrewd takeovers
Analysis:Ardagh’s latest acquisition target will add about €1.2 billion a year in sales and further expand the group’s presence in the US.
VNA has revenues of €1.2 billion. It has operations in California and Seattle – giving Ardagh a presence in the US’s west. Its current businesses are mainly in the eastern half.
It will also add the US wine industry to its customer base, something highlighted by chief executive Niall Wall yesterday.
The VNA purchase will mark another step forward for the glass and metal packaging group. Over the last decade, it has evolved from Irish-based manufacturer to global leader with 113 manufacturing operations in 26 countries and sales of €5.4 billion a year.
The evolution began in 2003 with the splitting of its international manufacturing operations and its Irish holding company.
Two acquisitions drove its expansion into a major international player. The first was Rexam’s European glass manufacturing business in 2007 for €660 million, a move that doubled Ardagh’s revenues to €1.25 million. The second followed in September 2010, when it bought Impress Co-operative for €1.7 billion from private equity player Doughty Hanson, owner of TV3.
Impress made metal containers, and its customers included John West and Del Monte, Crown Paints and household products manufacturer Procter Gamble.
Leap in size and workforce
The deal more than doubled Ardagh’s size for the second time – bring it from turnover of €1.25 billion a year to more than €3 billion, and increasing its workforce from 6,500 to over 14,000.
Ardagh paid for Impress with the proceeds of a bond issue, consisting of notes worth €1 billion and $800 million. The following February it raised a further €200 million from capital markets and declared its intention of further purchases.
The company was as good as its word, picking up Italian rival Fi Par, for €125 million in March 2011. Fi Par produced metal containers for the food and aerosol industries, with markets in Italy and Greece.
Two months later, Ardagh announced it was taking the first formal steps towards a flotation on Wall Street, which it hoped would happen in 2011.
The volatility stemming from the European sovereign debt crisis forced it to put those plans on hold, though it remains committed to flotation.
Meanwhile, it stayed on the acquisition trail, buying three smaller rivals last year. It began by paying €85 million for Boxal, another metal container manufacturer, this time with operations in France and the Netherlands. The deal brought with it a group of clients that included Coca-Cola, Heineken, and three cosmetics groups, Dove, L’Oréal and Nivea.
In March, it paid a reported €170 million for Leone Industries, a family-owned manufacturer in New Jersey, which makes bottles and jars. The following July, it announced its second-biggest acquisition, Anchor Industries, another US company, for €721 million.
Timeline Ardagh’s rise
2003Ardagh delists its international division from the Irish Stock Exchange, leaving behind a property-holding vehicle, South Wharf.
2007South Wharf nets €273 million from sale of Irish Glass Bottle Site at Ringsend. Pays €660 million for glass division of Rexam, doubling its size.
2010Pays €1.7 billion for Impress, doubling its size again to a €3 billion company and bringing it into metal containers.
2011Pays €125 for Italian player Fi Par.
2012Ardagh pays €85 million for Boxal and €170 million for Leone Industries in US. It announces that it is buying Anchor Industries in Florida for €721 million, significantly boosting its presence in the US.
2013Signs €1.275 billion deal for Verallia North America.