Packaging group, Orora (ASX:ORA), has agreed to sell its North American packaging solutions business to Veritev, a private equity-backed rival, for $1.78 billion.
The deal comes a year after Orora paid $2.16 billion for French glass company, Saverglass. While Saverglass faced challenges following the acquisition, it now appears to be recovering.
Orora announced to the ASX on Wednesday that it would sell Orora Packaging Solutions (OPS) for $1.78 billion on a cash and debt-free basis.
Net cash proceeds of $1.687 billion will be allocated as follows:
Expansion: A can plant in Brisbane will be expanded.
Financial restructuring: The company’s financial structure will be revamped, and debt will be reduced.
Capital management: A capital management initiative for shareholders will be implemented.
The sale follows a previously announced review of the US business and potential sales, as mentioned in the annual results.
Orora states that the sale will transform it into “a focused beverage packaging business with market-leading positions and a defensive growth profile across beverage substrates and end-markets.”
The transaction will leave Orora with a strong balance sheet, providing flexibility to pursue value-accretive organic growth opportunities.
Additionally, the sale will accelerate a $130 million investment in the Rocklea canning facility in Brisbane, expanding its capacity by 30%.
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Publish date : 2024-09-03 13:39:00
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