Orora agrees $1.4bn Saverglass acquisition

December 2023 | DEALFRONT | MERGERS & ACQUISITIONS

Financier Worldwide Magazine

December 2023 Issue

Australian glass manufacturer Orora has agreed to acquire private equity (PE) backed French high-end glassmaker Saverglass in a deal worth $1.4bn or A$2.2bn.

The deal is subject to consultation with employee representative bodies, and the transaction is subject to regulatory approvals.

Orora will fund the purchase with a A$450m institutional placement, a A$895m 1-for-2.55 accelerated non-renounceable pro-rata entitlement offer, as well as A$875m of debt financing, the company said in a statement.

“We are extremely pleased to welcome Saverglass into the Orora Group,” said Brian Lowe, chief executive of Orora. “This strategic acquisition further strengthens our existing glass business, establishing Orora as a global player of scale in attractive premium segments.

“Having worked with Saverglass for almost 40 years, I am delighted at the prospect of a new shareholder for the Group and its employees,” said Loïc Quentin de Gromard, honorary chairman of Saverglass. “It will enable Saverglass to continue implementing its strategy of investment and successful innovation for the benefit of its customers, which underpins the exceptional bonds of cooperation and trust built up with them. The deal also marks an exciting new chapter for the business, in which it can build on its strong heritage and unlock new opportunities to develop the ethical values on which the Saverglass community is founded.”

“Carlyle has been a valuable partner for us in recent years, and we are grateful to them for supporting our international growth strategy,” said Jean-Marc Arrambourg, chairman and chief executive of Saverglass. “We are convinced that the Orora Group is the perfect partner for Saverglass to continue our development, and we are confident that together we will be able to further accelerate our growth trajectory.”

“We are proud to have supported Saverglass, its management team and its employees over the last few years,” said Jonathan Zafrani, co-head of Carlyle Europe Partners. “Its ambitious growth strategy in new geographies – particularly in the Americas – has enabled it to strengthen its position across key markets and further build upon its technical expertise, creativity, and quality of service. We wish the company every success in this new phase of its life.”

Upon completion of the deal, Saverglass will become the centrepiece of Orora’s global glass business unit and will operate as a third platform for growth. The company will add a glass beneficiation plant at its Gawler site in South Australia to the Saverglass portfolio, which will form a global network of high-performance production facilities, with integration expected to occur over the next 12 months. Mr Arrambourg, will assume responsibilities over the new division, supported by Orora’s leadership team, alongside Saverglass’ management team who will remain with the business.

Saverglass has annual revenue of about $1.2bn and operates six factories in France, Belgium, Mexico and the United Arab Emirates. The company has made significant investments in its Mexico glassworks to bolster its expansion in the tequila market in recent years. According to Orora, the integration of the two businesses will deliver $15m in synergies and the deal was being struck at an adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) multiple of 7.7 times for the 12 months ended 30 June.

Saverglass, which designs, manufactures and decorates luxury glass bottles and carafes for wines and spirits, employs over 3900 people worldwide and sells more than 530,000 tonnes of glass a year, equivalent to 700 million bottles, in 100 countries. The company has announced its intention to reduce its carbon footprint by 50 percent by 2035, as part of its commitment to its longstanding sustainable development strategy. Saverglass has a 33 percent market share in the high-end spirits bottles market, and customers include brands such as Grey Goose, Glenfiddich and Hennessy.

Carlyle acquired Saverglass in March 2016 in a deal worth $630m. The firm reportedly explored a sale of the Saverglass business in early 2021 but that process was abandoned following failed discussions with a preferred bidder. Carlyle owns Australia’s second-largest wine company, Accolade Wines.

Richard Summerfield