Carlyle Group cashes out on its investment in Saverglass with the $2.16bn sale to Orora

Orora will pay $2.16bn to acquire French glass bottles maker Saverglass from US private equity giant The Carlyle Group as it tilts its business further towards the premium spirits and wine segment.

The Melbourne-based glass bottle and aluminium can manufacturer is raising $1.34bn to help pay for the acquisition, which it says will elevate it into one of the biggest glass bottle makers in the world in an industry where size is important.

Chief executive Brian Lowe said he was not concerned about buying a business from a private equity group, even though 250 people in Saverglass’ upper management had equity in the business which they will now cash out.

“The multiple we’ve paid for this business we think is very fair,” he said.

Saverglass has a 33%  market share in the high-end spirits bottles market, and customers include brands such as Grey Goose, Glenfiddich and Hennessy. The capital raising is in two parts – a $450m institutional placement and a $895m 1-for-2.55 rights issue priced at $2.70 a share.

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Orora shares last traded at $3.52 before being placed in a trading halt early last week and then a temporary suspension while it thrashed out the details of the complex transaction after it was first revealed by The Australian Financial Review’s Street Talk column.

Saverglass has annual revenue of about $1.2bn and operates six factories in France, Belgium, Mexico and the United Arab Emirates, with heavy investment in a factory in Mexico to bolster expansion in the tequila market.

Mr Lowe said the integration of the two businesses would deliver $15m in synergies and the deal was being struck at an adjusted EBITDA multiple of 7.7 times for the 12 months ended June 30.

Source: AFR

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