LONDON, UK / ACCESSWIRE / November 20, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for Berry Global Group, Inc. (NYSE: BERY) ("Berry"), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/'symbol=BERY. The Company announced on November 16, 2017, that it has signed an agreement with Griffon Corporation (NYSE: GFF) to acquire its subsidiary Clopay Plastic Products Company, Inc. The all-cash deal is valued at $475 million. For immediate access to our complimentary reports, including today's coverage, register for free now at:
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The acquisition is in-line with the Berry's growth strategy. The transaction is expected to close in Q1 2018 and is subject getting regulatory approvals and other closing conditions. Berry plans to finance the acquisition using a mix of cash in hand or via additional fresh debt offerings.
Commenting on the acquisition Tom Salmon, CEO of Berry, said:
"We are extremely excited with what Clopay's global capabilities and unique technology platform will add to our organization. The combination of Clopay with Berry's Health, Hygiene, and Specialties division broadens our position within the faster growing health and hygiene markets. Clopay will bring Berry new capabilities in the production of technical films, where they are a known innovator with patent protected breathable hygiene films."
Ronald J. Kramer, CEO of Griffon, added:
"We are pleased to announce the sale of Clopay Plastics. This transaction achieves our objectives of creating value for Griffon's shareholders while also providing enhanced opportunities for growth and value creation for Clopay Plastics and its customers."
How Berry benefits from this acquisition?
Berry expects the acquisition will result in annual cost of approximately $20 million. The Company's offer price represents adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) multiple of less than 6 times. This includes expected cost synergies plus tax basis step-up value.
Since both Berry and Clopay Plastics have complementary products, the acquisition will allow Berry to optimize its production capacities, reduce material, and conversion costs. This will help the Company expand its customer base and offer them the most comprehensive product portfolio in the industry. The acquisition will allow Berry to expand its reach in the lucrative and fast-growing health and hygiene markets by using innovative patent-protected technologies. The cost synergies from this transaction are in-line with similar acquisitions made by the Company.
About Clopay Plastics
Clopay Plastic Products Company is a global leader in the development and production of specialty plastic films for hygienic, health-care construction, and industrial protective apparel. It is a global supplier of printed breathable films as well as an innovator in the development of elastic films and laminates with product offerings uniquely designed for applications used in many markets. The Company has a global presence with strategic offices in US, Germany, Brazil, and China, and it has nearly 1,500 employees.
For fiscal year ended on September 30, 2017, the Company reported $461 million in sales and $53 million in operating EBITDA.
In early September 2017, Griffon had disclosed that it is looking for a buyer for Clopay Plastics and is exploring strategic options for its business.
Berry's financial results for FY Q4 and FY17
In a separate communication, Berry reported its financial results for fiscal Q4 and fiscal year 2017 for the period ending on September 30, 2017.
Net income for September 2017 quarter was $110 million, or $0.81 per diluted share, and adjusted net income per diluted share in the September 2017 quarter was 19% higher at $0.87. Net sales for September 2017 quarter was $1.9 billion and operating income was $199 million.
Net sales for the fiscal year 2017 was $7.1 billion and operating income was $732 million. Cashflow from operations for fiscal 2017 was $975 million and adjusted free cashflow was a record $601 million.
The Company expects cash flow from operations to be $965 million and adjusted free cash flow to be $610 million for fiscal year 2018.
About Berry Global Group Inc.
Evansville, Indiana based Berry is a Fortune 500 Company and a leading global manufacturer and marketer of value-added plastic consumer packaging and engineered materials. The Company designs its products using proprietary research and unique development and manufacturing technologies. Products include engineered materials, non-woven specialty materials, and consumer packaging.
The Company has over 13,000 customers and reported net sales of $7.1 billion in fiscal 2017.
About Griffon Corp.
Griffon was founded in 1959 and is headquartered in New York. It is a diversified management and holding Company that conducts business through wholly-owned subsidiaries. It oversees the operations of its subsidiaries, allocates resources among them, and manages their capital structures. It also provides direction and assistance to its subsidiaries regarding acquisition and growth opportunities including divestitures. Griffon also seeks out, evaluates and, when appropriate, acquires additional businesses that offer potentially attractive returns on capital.
Last Close Stock Review
At the closing bell, on Friday, November 17, 2017, Berry Global's stock slightly slipped 0.50%, ending the trading session at $59.61. A total volume of 1.32 million shares have exchanged hands, which was higher than the 3-month average volume of 871.55 thousand shares. The Company's stock price rallied 4.84% in the last three months, 5.39% in the past six months, and 28.66% in the previous twelve months. Moreover, the stock surged 22.33% since the start of the year. The stock is trading at a PE ratio of 23.45 and currently has a market cap of $7.81 billion.
On Friday, November 17, 2017, the stock closed the trading session at $22.50, declining 5.26% from its previous closing price of $23.75. A total volume of 138.52 thousand shares have exchanged hands, which was higher than the 3-month average volume of 87.95 thousand shares. Griffon's stock price surged 22.28% in the last three months, 1.58% in the past six months, and 7.91% in the previous twelve months. The stock is trading at a PE ratio of 27.99 and has a dividend yield of 1.07%. At Friday's closing price, the stock's net capitalization stands at $1.12 billion.
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