Goldman Sachs and Davy among Ardagh IPO underwriters
Containers group chairman says he aims to proceed with share sale in next five weeks
Ardagh executive chairman Paul Coulson: 36 per cent stake in group would be worth up to €2.4 billion, based on Merrion Capital’s valuation. Photograph: Frank Miller
Citigroup, which has been advising the glass and metal containers giant and its executive chairman Paul Coulson for some time on the deal, will lead the share sale alongside Goldman Sachs, Deutsche Bank, Barclays, Credit Suisse and JP Morgan, according to documents filed with the US Securities and Exchange Commission late last week. Davy and US bank Wells Fargo will be co-managers of the deal.
Mr Coulson (64) confirmed on Friday that he aims to press ahead in the next five weeks with the IPO, which, according to Merrion Capital analysts, may value the group at between €5.3 billion and €6.7 billion. On that basis, Mr Coulson’s 36 per cent stake would be worth as much as €2.4 billion.
However, IPOs are typically priced at a discount to ensure a successful market for the shares after flotation.
Ardagh Group launched a $1.9 billion bond sale on Friday as it sought to refinance more expensive debt as part of ongoing efforts to cut its costs before the IPO. It will use the proceeds to buy back debt originally due to be repaid between 2019 and 2022, which carries interest rates of up to 6.75 per cent.
Ardagh has engaged in a number of such refinancings in the past year, starting with the sale of $4.5 billion of bonds in April to pay for its largest acquisition to date and redeem some of its most expensive existing debt at the time. The transformational $3.4 billion purchase of a beverage cans operation of US packaging group Ball Corp and UK peer Rexam is central to Ardagh’s investment case for would-be equity investors.
The group said on Thursday that the acquisition helped Ardagh deliver a 23.9 per cent surge in earnings before interest, tax, depreciation and amortisation (ebitda) last year, to €1.16 billion. Ardagh’s sales rose to €6.34 billion from €5.2 billion year on year.
The group paid €114 million of transaction costs last year, primarily related to professional fees, bonuses and integration costs linked to the Ball-Rexam assets deal, as well as IPO-related costs.
The group’s total debt rose to €8.2 billion at the end of December from €6.4 billion a year earlier. However, its €772 million cash position helped bring its net debt down to €7.2 billion.