Jul 1, 2019   SOURCE: BusinessWire

Berry Global Group, Inc. Completes Acquisition of RPC Group Plc

Berry Global Group, Inc. (NYSE: BERY), today announced the completion of its acquisition of RPC Group Plc (RPC) for a purchase price of approximately $6.5 billion, which includes approximately $4.3 billion of cash paid for the equity interest in RPC and $2.2 of net debt and estimated transaction related costs, subject to closing adjustments. The combination of Berry and RPC creates a leading global supplier of valued-added protective solutions and one of the world’s largest plastic packaging companies.

Berry’s combined global footprint will consist of over 290 locations worldwide, including locations in North and South America, Europe, Asia, Africa, and Australia. The pro forma combined business will employ over 48,000 people across six continents with sales of approximately $13 billion based on the latest published financial statements of Berry and RPC.

“We are very excited to move forward together as a global plastic and recycled packaging industry leader, serving thousands of customers with our high-quality, innovative, and protective solutions along with the industry’s most diversified and expansive manufacturing footprint,” said Tom Salmon, Chairman and CEO of Berry. “The acquisition of RPC will give us the opportunity to leverage our combined know-how in innovative material science, product development, and manufacturing technologies to create significant value for our shareholders. Through this shared approach, we anticipate approximately $150 million in annual synergies.”

“We remain highly impressed by the tremendous depth of talent and resources embedded within RPC, and are looking forward to the opportunity to strengthen our combined platform with the wealth of experience and expertise this team has to offer. We believe this acquisition will further enhance the long-term outlook for our business and will provide a unique value creation opportunity for our shareholders,” stated Salmon.

The acquisition of RPC was financed with a portion of the proceeds of (i) Berry’s May 2019 sale of $1.25 billion of 4.875% first priority senior secured notes due 2026 and $500 million of 5.625% second priority senior secured notes due 2026 and (ii) a $4.25 billion incremental term loan and a €1.075 billion incremental term loan, which also served to refinance an existing Berry term loan.

Berry is scheduled to announce its third fiscal quarter earnings on August 7, 2019, and will provide an update on its progress at that time.

Goldman Sachs International, Wells Fargo Securities, and J.P. Morgan Securities acted as financial advisors and Freshfields, Bruckhaus Deringer LLP and Bryan Cave Leighton Paisner LLP acted as legal advisors for Berry.

About Berry

Berry Global Group, Inc. (NYSE:BERY), headquartered in Evansville, Indiana, is committed to its mission of ‘Always Advancing to Protect What’s Important,’ and proudly partners with its customers to provide them with value-added protective solutions that are increasingly light-weighted and easier to recycle or reuse. The company is a leading global supplier of a broad range of innovative rigid, flexible, and non-woven products used every day within consumer and industrial end markets. Berry, a Fortune 500 company, has over 48,000 employees and generated approximately $13 billion of sales in fiscal year 2018 on a combined pro forma basis from operations that span over 290 locations on six continents. For additional information, visit Berry’s website at berryglobal.com.

Combined Pro Forma Information

RPC is a public limited company incorporated under the laws of England and Wales that provides public financial statements semi-annually. RPC has not reported historical financial statements for any periods subsequent to the six-month period ended September 30, 2018. RPC’s historical financial statements were prepared in accordance with International Financial Standards as adopted by the European Union (“IFRS”), which differ from generally accepted accounting principles in the United States (“GAAP”). Berry has made various adjustments to reflect known IFRS to GAAP differences and to translate RPC’s financial statements from British Pounds to U.S. dollars based upon applicable historical exchange rates, which may differ materially from future exchange rates. No assurance can be given that there will not be differences between the pro forma financial information included herein and the pro forma financial statements that Berry will be required to file with the Securities and Exchange Commission (the “SEC”) or that such differences will not be material. For further information, see Exhibit 99.2 to Berry’s Form 8 K filed with the SEC on May 15, 2019.

Forward-Looking Statements

Statements in this release that are not historical, including statements relating to the expected future performance of the Company, are considered “forward looking” 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,” “anticipates,” “outlook,” or “looking forward,” or similar expressions that relate to our strategy, plans, or intentions. All statements we make relating to our estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates, and financial results or to our expectations regarding future industry trends are forward-looking statements. In addition, we, through our senior management team, from time to time make forward-looking public statements concerning our expected future operations and performance and other developments. These forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore, our actual results may differ materially from those that we expected.

Important factors that could cause actual results to differ materially from our expectations, which we refer to as cautionary statements, are disclosed under “Risk Factors” and elsewhere in our Annual Report on Form 10-K and subsequent filings with the SEC, including, without limitation, in conjunction with the forward-looking statements included in this release. All forward-looking information and subsequent written and oral forward-looking statements attributable to us, or to persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements. Some of the factors that we believe could affect our results include: (1) changes in prices and availability of resin and other raw materials and our ability to pass on changes in raw material prices on a timely basis; (2) performance of our business and future operating results; (3) risks related to acquisitions and integration of acquired businesses; (4) potential failure to realize the intended benefits from recent acquisitions and the acquisition of RPC, including, without limitation, the inability to realize the anticipated cost synergies in the anticipated amounts or within the contemplated timeframes or cost expectations, the inability to realize the anticipated revenues, expenses, earnings and other financial results, and growth and expansion of our operations, and the anticipated tax treatment; (5) risks associated with our substantial indebtedness and debt service; (6) risks related to international business, including foreign currency exchange rate risk and the risks of compliance with applicable export controls, sanctions, anti-corruption laws and regulations; (7) risks of competition, including foreign competition, in our existing and future markets; (8) uncertainty regarding the United Kingdom’s withdrawal from the European Union and the outcome of future arrangements between the United Kingdom and the European Union; (9) risks related to the phase-out of the London Interbank Offered Rate (LIBOR), or the replacement of LIBOR with a different reference rate or modification of the method used to calculate LIBOR; and (10) the other factors discussed under the heading “Risk Factors” in our Annual Report on Form 10-K and subsequent filings with the SEC. We caution you that the foregoing list of important factors may not contain all of the material factors that are important to you. Accordingly, readers should not place undue reliance on those statements. All forward-looking statements are based upon information available to us on the date of this release. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law