Swiss packaging maker SIG Combibloc plans to sell €1 billion ($1.2 billion) worth of new shares "in coming months" to trim debt to levels normal for the industry, CEO Rolf Stangl said on Monday.
The company did not give a specific date for the IPO, which sources have told Reuters would value the company at about €5 billion.
Canadian private equity firm Onex, majority owner since 2015, and SIG management may also sell existing shares, although Onex will retain at least 50%, with a "market-typical lock-up" following the IPO.
Plan To Cut Debts
SIG plans to cut debt to about €1.5 billion, or 3-3.25 times adjusted earnings before interest, taxes and depreciation (EBITDA) of €480 million, from about €2.5 billion now.
While new-share proceeds will go toward cutting debt, Stangl said SIG generates ample cash already to invest in expansion, including recent moves in India, Japan and a new €35 million facility in China.
"We have been investing constantly in our business -- we don't need a listing on the exchange for that," Stangl told Reuters.
This would be the tenth listing on the Swiss stock exchange this year and would mark a return of SIG to the bourse.
The company had been listed until 2007 as part of the Schweizerische Industrie Gesellschaft (SIG) conglomerate that once made everything from passenger trains to weaponry but over the years trimmed its focus to drink cartons.
Next year, SIG expects to pay a dividend of approximately €100 million. From 2019 onwards, it plans a payout ratio of between 50% and 60% of adjusted net income.
In an industry dominated by SIG, with about 21% of carton packaging volume in its core markets, and much-larger, privately held Tetra Laval, Stangl said his company is focused on growing organically, not through acquisitions.
On The Attack
"We feel very comfortable with our industry position as the No. 2 and the attacker," Stangl said, adding his company has sought to introduce new technology -- microwave-safe cartons for ready-made breakfasts in Asia, for instance -- to win customers.
"With such differentiation, we've always been successful at jumping into markets as the newcomer."
SIG makes 90% of revenue from packaging material, and 10% from filling machinery and service.
In the 12 months until the end of June, SIG had sales of €1.67 billion, with an adjusted EBITDA margin of 28.7%, up from about 27% in 2017, Stangl said.
BofA Merrill Lynch, Credit Suisse and Goldman Sachs International are Joint Global Coordinators and Joint Bookrunners.
Barclays, Citigroup, Morgan Stanley and UBS Investment Bank are Joint Bookrunners, while UniCredit Bank AG and Vontobel are acting as Co-Lead Managers. Rothschild & Co. is independent financial adviser.
News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.
