Ardagh Group has entered into an agreement to combine its metal packaging business with Gores Holdings V, creating a new public listed company with an enterprise value of $8.5 billion.
The deal will see Gores Holdings V – a special purpose acquisition company sponsored by global investment firm The Gores Group – merge with Ardagh’s metal packaging division to create Ardagh Metal Packaging (AMP), which will apply for a listing on the New York Stock Exchange.
Upon completion of the transaction, Ardagh will retain an approximately 80% stake in AMP and receive up to $3.4 billion in cash.
The deal includes up to $525 million in cash from Gores Holdings V and $600 million in a private placement led by investors, as well as approximately $2.3 billion of new debt raised by AMP. Investors in the private placement will hold approximately 10% in the new company, while Gores Holdings V’s stockholders will own the remaining 10% share.
AMP produces recyclable beverage cans for the Americas and Europe and intends to continue capitalising on environmental products and traditional and new beverage categories following the transaction.
Paul Coulson, chairman and CEO of Ardagh, said: “The business has grown significantly since our acquisition of the metal beverage packaging business in 2016 and we have a clear roadmap that we believe will lead us to more than double adjusted EBITDA by 2024, as we invest in support of our customers’ growth.
“We are delighted to partner with Gores Holdings V to create a NYSE-listed pure-play beverage can business of scale with impeccable ESG credentials, and we intend to remain a committed, long-term majority shareholder of AMP as it continues its growth journey.”
Last year, Ardagh purchased a facility in Ohio and announced it was increasing the production capacity of its Mississippi plant, in response to increased demand for infinitely recyclable beverage cans.
“Sustainability is an important component of our investment strategy, and AMP is a clear leader in this space – environmentally, ecologically and socially,” said Mark Stone, senior managing director of The Gores Group and CEO of Gores Holdings V.
“As customers around the world continue to demand sustainable solutions, we believe the company is strongly positioned to capitalise on the exceptional growth opportunities ahead and we’re thrilled to be partnering with the team to do so,” he added.
Oliver Graham, CEO of Ardagh Metal Beverage will take up the role of AMP CEO, while Ardagh chairman and CEO, Paul Coulson, will serve as chairman of the combined company.
The merger is expected to close in the second quarter of 2021, which will see Ardagh retain 100% ownership of its glass packaging business, as well as its 42% stake in Trivium Packaging.
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