EVANSVILLE -
The Boards of Directors of Berry and Glatfelter have unanimously approved the transaction.
The new combined company ('NewCo') will become a global leader in the growing specialty materials industry, serving the world's largest brand owners across global end markets with favorable long-term growth dynamics. HHNF brings an extensive portfolio of proprietary technologies, with a strong focus on healthcare, hygiene, and specialty end markets, while Glatfelter provides a broad range of innovation capabilities and sustainability solutions. Together, the combined company will offer a highly complementary product suite, including both polymer-based and fiber-based solutions, supported by strong innovation capabilities, with significant geographic diversification and a presence in all major markets.
'This announcement is the culmination of a comprehensive review of strategic alternatives to determine the value-maximizing path forward for Berry shareholders,' said
'The uniting of our organizations creates a
Berry to Enhance its Focus on Consumer Packaging Leadership
In September, Berry announced a review of strategic alternatives for its Health, Hygiene & Specialties ('HH&S') segment. Today's announcement is the culmination of a comprehensive review of strategic alternatives to determine the value-maximizing path forward for Berry shareholders. The remaining HH&S businesses, including Berry's tapes business, will be retained by Berry.
The proposed transaction marks an important milestone in Berry's transition to becoming a streamlined and focused provider of consumer packaging. Post-separation, Berry will continue to offer industry-leading products, solutions, and material science to help customers achieve their commercial and sustainability goals. Pro forma for the separation transaction, Berry generated approximately
Glatfelter to Deliver Significant Shareholder Value and Platform for Future Growth
For Glatfelter, the proposed transaction represents the next significant milestone in the Company's time-tested strategy as a leading global supplier of specialty materials. The combination of Berry's HHNF business and Glatfelter provides meaningful scale given the complementary technology and product portfolios, along with a platform for considerable growth in future periods. The transaction provides NewCo the opportunity to deliver significant value creation for Glatfelter shareholders by immediately deleveraging Glatfelter's balance sheet and increasing the equity value of the overall enterprise, while also enhancing its credit profile with customers and suppliers. Glatfelter's recent focus on optimizing its portfolio, managing the price/cost spread dynamic, and driving commercial and operational excellence, along with G&A cost discipline, provides the foundation to meaningfully contribute towards the overall success of NewCo.
Financial Highlights
Together, HHNF and Glatfelter generated pro forma revenue of approximately
Adjusted/Operating EBITDA are non-GAAP measures that refer to earnings before interest, taxes, depreciation, and amortization, pro forma, and as further described as Operating EBITDA for the LTM period ended
Pro forma net leverage is a non-GAAP measure and refers to NewCo.'s net debt divided by adjusted EBITDA
Governance and Management
The new, publicly-traded company, which will be renamed and rebranded by transaction close, will be led by
'I am humbled and honored to be trusted as the leader of this new global enterprise and its 8,700 skilled and dedicated team members. This combination positions us to delight our customers, enhance the lives of our employees, and create value for our shareholders. Today's announcement is the first step in creating a pure-play leader in nonwovens and specialty materials well-positioned in growing, global markets. We will increase the combined company's relevance as a supplier of choice, through product innovation, superior service, and reliability. Our combined, well-invested platforms will provide value-added product offerings with leading sustainability-driven solutions for brand-owner customers globally,' stated
The Board of Directors of the combined company will initially be comprised of nine total members, consisting of six designated by Berry and three designated by Glatfelter. The chairman will be designated by Glatfelter, and all directors will be named at a future date.
Strategic Rationale of the Combination
Creates a leading global competitor in the large and growing specialty materials industry
Broadens substrate, product and end market mix, combining highly complementary portfolios
Provides for significant geographic diversification with a presence in all major markets
Scales resources to drive innovation and leverage R&D across a large, global franchise
Combines extensive operational expertise, coupled with deep industry knowledge and technical know-how
Enables significant synergy potential; expected cost synergies
Transaction Details
The transaction is being structured as a
Ownership: Berry shareholders will own 90% of the combined company's common shares upon consummation of the transaction. Glatfelter shareholders will own the remaining 10% of the combined company.
Cash Proceeds: Berry is expected to receive net cash proceeds of approximately
Financing: NewCo. has obtained committed financing from
Closing: Closing of the transaction is expected to occur in the second half of calendar 2024, subject to various customary closing conditions, including regulatory approvals and Glatfelter shareholder approval. No vote of Berry's shareholders is required for the transaction. Employee representation will be involved where applicable.
Pro Forma Impact to Berry: The transaction is expected to be leverage neutral to Berry.
Additionally, prior to closing of the transaction, Glatfelter will complete a reverse stock split of all of its issued and outstanding common stock. The reverse stock split ratio will be determined by Glatfelter and Berry, closer to the closing date of the transaction, and additional information will be provided prior to the effective time of the reverse stock split.
Conference Call Details
Berry and Glatfelter management will together discuss the transaction on a joint conference call/webcast scheduled for today at
This will be followed by a separate conference call to discuss Berry's fiscal first quarter 2024 financial results at
By Telephone
Participants may register for the transaction announcement call here now or any time up to and during the time of the call, and will immediately receive the dial-in number and a unique pin to access the call. While you may register at any time up to and during the time of the call, you are encouraged to join the call 10 minutes prior to the start of the event.
Via the Internet
The transaction-related conference call and accompanying webcast slides will also be broadcast live over the internet. To access the event, click on the following link: https://ir.berryglobal.com/financials. A replay of the webcast will be available via the same link on our website approximately two hours after the completion of the call.
Advisors
Cautionary Statement Concerning Forward-Looking Statements
Statements in this release that are not historical, including statements relating the expected timing, completion and effects of the proposed transaction between Berry and Glatfelter, are considered 'forward looking' within the meaning of the federal securities laws and are presented pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements because they contain words such as 'believes,' 'expects,' 'may,' 'will,' 'should,' 'would,' 'could,' 'seeks,' 'approximately,' 'intends,' 'plans,' 'estimates,' 'projects,' 'outlook,' 'anticipates' or 'looking forward,' or similar expressions that relate to strategy, plans, intentions, or expectations. All statements relating to estimates and statements about the expected timing and structure of the proposed transaction, the ability of the parties to complete the proposed transaction, benefits of the transaction, including future financial and operating results, the combined company's plans, objectives, expectations and intentions, and other statements that are not historical facts are forward-looking statements. In addition, senior management of Berry and Glatfelter, from time to time make forward-looking public statements concerning expected future operations and performance and other developments.
Actual results may differ materially from those that are expected due to a variety of factors, including without limitation: the occurrence of any event, change or other circumstances that could give rise to the termination of the proposed transaction; the risk that Glatfelter shareholders may not approve the transaction proposals; the risk that the necessary regulatory approvals may not be obtained or may be obtained subject to conditions that are not anticipated; risks that any of the other closing conditions to the proposed transaction may not be satisfied in a timely manner; risks that the anticipated tax treatment of the proposed transaction is not obtained; risks related to potential litigation brought in connection with the proposed transaction; uncertainties as to the timing of the consummation of the proposed transaction; unexpected costs, charges or expenses resulting from the proposed transaction; risks and costs related to the implementation of the separation of Berry's HH&S global nonwovens and films business into a new entity ('
About Berry
At
About Glatfelter
Glatfelter is a leading global supplier of engineered materials with a strong focus on innovation and sustainability. The Company's high-quality, technology-driven, innovative, and customizable nonwovens solutions can be found in products that are Enhancing Everyday Life. These include personal care and hygiene products, food and beverage filtration, critical cleaning products, medical and personal protection, packaging products, as well as home improvement and industrial applications. Headquartered in
Contact:
Tel: +1 812.306.2964
Email: ir@berryglobal.com
Tel: +1 812.250.3884
Email: mediarelations@berryglobal.com
Tel: +1 717.225.2746
Email: Ramesh.Shettigar@glatfelter.com
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