Market Overview

Amcor Limited and Bemis Company, Inc. to Combine in US$6.8 Billion All-Stock Transaction

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Highlights

  • Strategic combination to create the global leader in consumer packaging
  • Comprehensive global footprint with greater scale in every region
  • Industry leading R&D capabilities and better positioned to capture
    sustainable packaging opportunities
  • Stronger value proposition for shareholders, customers, employees and
    the environment
  • Combined revenues of US$13 billion, EBITDA of US$2.2 billion(1),
    annual cash flow after capital expenditure of more than US$1 billion
    and an investment grade balance sheet
  • All-stock cash free transaction: Amcor shareholders to own 71%; Bemis
    shareholders to own 29% of combined company
  • Double-digit pro-forma EPS(2) accretion for all
    shareholders including run-rate cost synergies of US$180
    million incremental to Bemis' "Agility" improvement plan
  • Amcor to establish primary listing on NYSE with an estimated market
    capitalization of US$17 billion(3) and to maintain a
    listing on ASX, with expected index inclusion in both markets

Amcor Limited (ASX: AMC) and Bemis Company, Inc. (NYSE:BMS) today
announced that their respective Boards of Directors have unanimously
approved a definitive agreement under which Amcor will acquire Bemis in
an all-stock combination. Combining these two complementary companies
will create the global leader in consumer packaging, with the footprint,
scale and capabilities to drive significant value for shareholders,
offer customers and employees the most compelling value proposition in
the packaging industry and deliver the most sustainable innovations for
the environment.

The transaction will be effected at a fixed exchange ratio of 5.1 Amcor
shares for each Bemis share, resulting in Amcor and Bemis shareholders
owning approximately 71% and 29% of the combined company, respectively.
This is equivalent to a transaction price of US$57.75 per Bemis share
based on Amcor's closing share price of A$15.28(4) on August
3, 2018, and represents a premium of 25% to Bemis' closing price of
US$46.31 per share as of August 2, 2018(5).

Amcor's CEO, Ron Delia, said: "The strategic rationale for this
combination and the financial benefits are highly compelling for both
Amcor and Bemis shareholders. We are convinced this is the right deal at
the right time for both companies, and with the right structure for both
sets of shareholders to participate in a unique value creation
opportunity. Amcor identified flexible packaging in the Americas as a
key growth priority and this transaction delivers a step change in that
region.

"There are an increasing number of opportunities arising for a leading
packaging company to capitalize on shifting consumer needs, an evolving
customer landscape and the need to provide responsible packaging
solutions that protect the environment. With this transaction, Amcor
will have a stronger value proposition with the scale, breadth and
resources to unlock value from these opportunities, for the benefit of
our shareholders, customers and employees.

"Amcor's financial profile will be enhanced, and our existing capital
allocation framework, or shareholder value creation model, will be
maintained and strengthened with this transaction. The combined company
expects to have an investment grade balance sheet that provides
immediate capacity for further disciplined investment as well as a
compelling, progressive dividend. Amcor will draw on our extensive
merger integration experience to deliver the substantial benefits of
this combination."

Bemis' President and CEO, William F. Austen, said: "The combination of
Bemis and Amcor is transformational, bringing together two highly
complementary organizations to create a global leader in consumer
packaging. We believe this combination, which is an exciting growth
story for both companies, will benefit all stakeholders. Our employees
will benefit as part of a larger and more global organization focused on
a commitment to customer service, integrity and supporting strong teams.
In addition, the combination will enable us to offer global, regional
and local customers the most compelling value proposition in the
industry through a broader product portfolio, increased product
differentiation and enhanced operating capabilities, while leveraging
Bemis' extensive U.S. manufacturing base and strengths in material
science and innovation. Our shareholders will receive a significant
premium in this transaction, reflecting the value we've built as an
organization, as well as the opportunity to continue to participate in
the upside potential of a more diversified combined company with greater
scale and resources. We look forward to working together with Amcor to
ensure a seamless integration."

Amcor's CEO, Ron Delia, concluded, "Amcor and Bemis have many things in
common starting with proud histories that date back more than 150 years.
Both companies are grounded in strong values, a shared commitment to
innovation and value-added consumer packaging, and have talented
management teams."

"We have always had a great deal of respect for Bemis and we are
thrilled that its team in Wisconsin and around the world will be joining
Amcor. Many people at Amcor today have joined us through acquisitions,
including many of our leadership team, and we would expect Bemis to be
well represented in Amcor at all levels of the organization."

Strategic Rationale

After completion of the transaction, Amcor will have a stronger and more
differentiated value proposition for global, regional and local
customers through:

  • Comprehensive global footprint with more balanced, profitable
    exposure to emerging markets:
    A global flexible packaging
    footprint across key geographies; a larger, more balanced and more
    profitable emerging markets business, with sales of some US$3.5
    billion from around 30 emerging markets;
  • Greater scale to better serve customers in every region: Increased
    economies of scale and resources through Amcor's leading positions in
    Europe, Asia and Latin America, and Bemis' leading positions in North
    America and Brazil;
  • Increased exposure to attractive end markets and product segments:
    An enhanced growth profile from greater global participation in
    protein and healthcare packaging, leveraging innovative technologies
    in barrier films and foils;
  • Best-in-class operating and innovation capabilities: Greater
    differentiation to innovate and meet customer demands for new and
    sustainable products through the deployment of proven,
    industry-leading commercial, operational and R&D capabilities;
  • A continued strong commitment to environmental sustainability: Enhanced
    capabilities behind Amcor's pledge to develop all recyclable or
    reusable packaging products by 2025; and
  • Greater depth of management talent: A stronger combined team by
    bringing the significant strengths and quality of the workforce across
    both companies.

Financial Rationale

The combination creates substantial value for shareholders of both
companies through:

  • Compelling transaction metrics:
    • all-stock acquisition at an implied value in line with Amcor's
      current trading EV/EBITDA multiple, pre cost synergies;
    • pre-tax annual cost synergies of approximately US$180 million
      (representing approximately 4% to 5% of Bemis sales) by the end of
      the third year from procurement, manufacturing and G&A efficiencies(6),
      incremental to Bemis' "Agility" improvement plan;
    • double digit proforma EPS(2) accretion for all
      shareholders inclusive of cost synergies at full run rate(1);
      and
    • double digit returns in excess of Amcor's Weighted Average Cost of
      Capital (WACC).
  • Stronger financial profile going forward:
    • higher margins through the delivery of cost synergies;
    • potential to grow at higher rates over the long term through a
      stronger customer value proposition; and increased exposure to
      attractive segments, which would be additive to the transaction
      metrics;
    • annual cash flow, after capital expenditure and before dividends,
      in excess of US$1 billion; and
    • investment grade balance sheet with immediate capacity for further
      investment.
  • Greater liquidity for investors:
    • through a primary listing on the New York Stock Exchange ("NYSE")
      and a listing on the Australian Securities Exchange ("ASX") via
      CHESS Depositary Interests ("CDI's"); and
    • expected inclusion in both the US S&P 500 index as well as in the
      S&P / ASX 200 index.
  • Cash and tax free:
    • cash and tax free transaction for shareholders in a share for
      share exchange.

Transaction Structure

The combination will be effected through a merger of Amcor and Bemis
into a newly created holding company (‘New Amcor') incorporated in
Jersey. It is intended that New Amcor will be tax resident in the UK
after closing. New Amcor will have a primary listing on the NYSE and a
listing on the ASX. Amcor and Bemis shareholders will receive shares in
New Amcor in a tax-free exchange. Existing Amcor shareholders will have
the option to receive one New Amcor ASX listed CDI or one New Amcor NYSE
listed share for each Amcor share held. Bemis shareholders will receive
5.1 New Amcor NYSE shares for each Bemis share held, resulting in Amcor
and Bemis shareholders owning approximately 71% and 29% of the combined
company, respectively.

This structure has several key benefits, including:

  • Listings on two major global exchanges with primary listing on the
    NYSE and an ASX listing via CDIs;
  • Expected index inclusion in the S&P 500 of the full market
    capitalization of the combined company (estimated at US$17 billion(3))
    and pro-rata inclusion of CDIs in the S&P / ASX 200 index, resulting
    in greater liquidity and considerably increased index buying; and
  • Ongoing financial strength and funding flexibility for continued
    investment.

Financial effects

After completion of the transaction it is expected that key aspects of
Amcor's financial profile will remain largely unchanged, including:

  • A compelling, progressive dividend which will continue to be an
    important component of annual shareholder returns;
  • Post closing, the first annual dividend paid by New Amcor is expected
    to be no less than the value of the last annual dividend per share
    declared by Amcor prior to completion of the transaction, providing
    significant dividend per share accretion to Bemis shareholders; and
  • An on-going capital allocation philosophy consistent with Amcor's
    shareholder value creation framework.

Governance and Community

Upon completion of the transaction, New Amcor's Board is expected to
comprise 11 members, 8 of whom are current Amcor directors, and 3 of
whom are current Bemis directors. Amcor's current Chairman, Graeme
Liebelt and current CEO Ron Delia will continue in those roles after the
transaction and Mr. Delia will continue to serve as the only Executive
Director on the Board.

New Amcor will continue to maintain a critical presence in Wisconsin and
other key Bemis locations. The combined company also expects to leverage
Bemis' plant network and innovation center while continuing to invest in
the U.S. New Amcor will continue to support the communities in which
Bemis operates and announced today a contribution of US$35,000 to the
Bemis Foundation on behalf of Amcor's 35,000 employees world-wide.

Conditions to the Transaction and Other Terms

Closing of the transaction is conditional upon the receipt of regulatory
approvals, approval by both Amcor and Bemis shareholders, and
satisfaction of other customary conditions. Subject to the satisfaction
of the conditions to closing, the transaction is targeted to close in
the first quarter of calendar year 2019.

Under the terms of the transaction agreement, prior to closing each
party will be permitted to continue paying dividends in an amount and on
timing consistent with past practice.

The full terms of the transaction, including the closing conditions and
other terms described herein, are set out in the transaction agreement,
which is lodged in a separate announcement.

Analyst and investor briefing

Amcor and Bemis will hold two joint calls for analysts and investors:

  • Conference call 1 – August 6: 8:30 am US Central Daylight Time / 9:30
    am US Eastern Daylight Time / 11:30 pm Australian Eastern Standard
    Time. Participant code 8388696
  • Conference call 2 – August 7 Australia / August 6 US: 10:00 am
    Australian Eastern Standard Time / 07:00 pm US Central Daylight Time /
    08:00 pm US Eastern Daylight Time. Participant code 9992019

To access the presentation slides, go to www.Amcor.com
and click on the relevant link after scrolling down on the homepage or
the investors page, or go to www.Bemis.com
and click on the presentations section. We recommend participants dial
in 10 to 15 minutes prior to the start of the presentation using the
teleconference details below:

   
Australia 1800 175 864 / +61 2 8373 3507
United States 1855 823 0291 / +1 469 666 9932
Canada 1855 277 1647 / +1 64 7426 9741
United Kingdom 0808 234 1368 / +44 20 3651 4875
Hong Kong 800 963 435 / +852 3051 2791
All other countries +61 2 8373 3550
 

Advisors

UBS AG, Australia Branch and Moelis & Company LLC are acting as joint
financial advisors and Kirkland & Ellis and Herbert Smith Freehills as
legal counsel to Amcor.

Goldman Sachs & Co LLC is acting as financial advisor and Faegre Baker
Daniels LLP, Cleary Gottlieb Steen & Hamilton LLP and MinterEllison as
legal counsel to Bemis.

Overview of Amcor

Amcor is a global leader in responsible packaging solutions, supplying a
broad range of rigid and flexible packaging products into the food,
beverage, healthcare, personal care and other fast moving consumer end
markets. Amcor operates around 195 sites in over 40 countries, with
approximately 35,000 employees. For the year ended 30 June 2017, Amcor
generated revenues of US$9.1 billion and EBITDA of US$1.4 billion.

Overview of Bemis

Bemis Company, Inc. ("Bemis") is a supplier of flexible and rigid
plastic packaging used by leading food, consumer products, healthcare,
and other companies worldwide. Founded in 1858, Bemis reported 2017 net
sales of US$4.0 billion. Bemis has a strong technical base in polymer
chemistry, film extrusion, coating and laminating, printing, and
converting. Headquartered in Neenah, Wisconsin, Bemis employs
approximately 16,000 individuals worldwide. More information about Bemis
is available at our website, www.Bemis.com.

 

FOOTNOTES

 
1)   After taking into account US$180 million pre-tax cost synergies.
2) Excludes the impact of purchase accounting.
3) Excluding the value of capitalized synergies.
4) Equivalent to a US dollar share price of US$11.32 based on a AUD:USD
exchange rate of 0.7411 as of August 3, 2018.
5) August 2, 2018 being the last trading day prior to market
speculation on August 3, 2018 in relation to a transaction between
Amcor and Bemis.
6) Cost to achieve synergies estimated to be US$150 million. These
costs are expected to be funded by capital expenditure and working
capital savings. Costs are expected to be incurred across years 1
and 2.
 

Cautionary Statement Regarding Forward-Looking
Statements

This communication contains certain statements that are "forward-looking
statements" within the meaning of Section 27A of the Securities Act of
1933, as amended (the "Securities Act"),
and Section 21E of the Securities Exchange Act of 1934, as
amended. Amcor Limited ("Amcor"), its
subsidiary Arctic Jersey Limited ("New Amcor")
and Bemis Company, Inc. ("Bemis") have
identified some of these for

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