Shares in Ardagh Group soared as much as 19.7 per cent as the glass and metal containers giant floated on the New York Stock Exchange on Wednesday, valuing the company at $5.32 billion (€5 billion).
Ardagh priced its initial public offering of 16.2 million shares, equivalent to a 6.9 per cent stake, at $19 each on Tuesday night. The shares jumped to as high as $22.74 within hours of the group's executive chairman Paul Coulson ringing the opening bell of the New York Stock Exchange on Wednesday, closing 18.2 per cent stronger at €22.465.
Speaking to The Irish Times, Mr Coulson said that while the company had been planning to join the NYSE on Thursday, it decided to move the deal forward by a day given the amount of demand there was for the stock and so as not to open the transaction to potential market volatility as the US Federal Reserve prepared to announce its latest rates decision.
“We knew demand was good before we started,” Mr Coulson said, adding that the banks organising the share sale received orders that were a “high single digit” times what was on offer. This implies orders of as much as $2.7 billion.
Mr Coulson, whose owns 33.5 per cent stake following the share sale is valued at $1.78 billion, had been planning a flotation of Ardagh since at least 2011, having taken the company private in 2003, a year after closing its original Ringsend bottle plant in Dublin.
Acquisitions
Ardagh subsequently spent €7.5 billion on acquisitions on both sides of the Atlantic, turning itself into one of the world’s largest glass bottle and metal container makers, with customers ranging from
Heineken
to
John West
and L’Oréal.
The company is forecasting earnings before interest, tax, depreciation and amortisation (ebitda) of about €1.4 billion this year.
The company had net debt of €7.2 billion at the end of 2016, and Mr Coulson has said the proceeds of the share sale would be used to lower its debt burden. The deal cuts Ardagh’s net debt to five times ebitda from 5.4.
While having a stock quotation gives Ardagh another currency to carry out further acquisitions, Mr Coulson said the company was continuing to integrate its largest ever deal, the $3.4 billion purchase last June of a beverage cans operation from US rival Ball Corp and the UK's Rexam before their own merger.
“We are acquisitive. We will be buying things,” Mr Coulson said. “But there’s nothing on the horizon at the moment.”
New investors
Ardagh’s chief executive officer,
Ian Curley
, who joined the company last year having previously been chief financial officer at paper packaging group
Smurfit Kappa
, said the new investors in the business were “blue-chip” type fund managers, mainly from the US, but also including some European names. He declined to identify the new shareholders.
Meanwhile, the firms underwriting the deal – Citigroup, Deutsche Bank, Goldman Sachs, Barclays, Credit Suisse, JP Morgan, Davy and Wells Fargo – have the option to purchase a further 2.43 million shares from Ardagh within 30 days and place them on the market.
