Orora’s Bold Move: Acquiring Saverglass with an Equity Boost

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Orora’s Game-Changing Move: Acquiring Saverglass

In a resounding announcement, Orora has set the wheels in motion for a transformative acquisition. The target: Saverglass, a global titan renowned for its prowess in crafting high-end bottles tailored for the premium and ultra-premium spirit and wine markets. This strategic move comes just days after Orora confirmed its exploratory discussions regarding this momentous acquisition.

A Deal of Significance

The financial landscape of this acquisition is nothing short of remarkable, with an enterprise value soaring to EUR 1,290 million (AUD 2,156 million). This figure translates into an implied multiple of 7.7x Adjusted EBITDA for Saverglass over the last 12 months leading up to June 2023 (Jun-23), which stands at an impressive EUR 168 million. (Please note that these figures exclude any proforma synergies.)

A Synergy of Growth

From a commercial, product, and geographical perspective, the convergence of Saverglass and Orora promises a wealth of value creation opportunities for the Combined Group. Immediate synergies worth AUD 15 million are anticipated, stemming from network optimization, cost rationalization, and operational streamlining. This strategic move isn’t just about numbers; it’s about delivering tangible results for Orora’s shareholders. Anticipated to be mid-single digit EPS accretive, including full run-rate synergies, in the first full financial year of ownership, this acquisition is poised to be a game-changer.

Fueling Growth and Expansion

On a pro forma basis, the Acquisition signifies an impressive c. 69 percent upswing in Orora’s Underlying FY23 EBITDA, catapulting it to c. AUD 749 million (excluding any pro forma synergies). This remarkable feat results in a 320bps increase in Underlying EBITDA margin, underlining the strategic prowess of this move.

Navigating the Path Ahead

Orora, in conjunction with the vendors of Olympe SAS, has laid the groundwork for this monumental acquisition. The Put Option Agreement allows the vendors the option to sell shares in Olympe SAS to Orora. However, this pivotal step is contingent upon the completion of mandatory French works council consultation processes to adhere to French labor laws. Following the exercise of the put option and the execution of a binding Share Purchase Agreement, the acquisition will move forward, subject to customary conditions precedent, including obtaining regulatory approvals. Completion is anticipated in the last quarter of CY2023, marking a momentous milestone for Orora’s strategic expansion.

Stay tuned as Orora charts its course toward an exciting future, marked by innovation, growth, and strategic excellence.

The full announcement is available here.

Source: Orora  with additional information added by Apazone

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