April 9, 2019 / 9:43 AM / 5 months ago

Exclusive: Bottle maker Verallia set for possible 4 billion euros IPO - sources

FRANKFURT (Reuters) - Buyout group Apollo is preparing French glass bottle maker Verallia for a stock market listing later this year, in what could become one of the largest French initial public offerings of the year, people close to the matter said.

FILE PHOTO: Bottles of Ricard's aniseed-flavoured beverage are pictured at the Ricard manufacturing unit in Lormont, near Bordeaux, France February 15, 2019. REUTERS/Regis Duvignau/File Photo

The private equity firm, which is working with Lazard as its IPO advisor, has asked banks to pitch in coming days for roles in organizing the flotation, which could value Verallia at more than 4 billion euros ($4.5 billion), they said.

Rothschild is advising Verallia, they added.

Verallia, which traces its roots back to the Vauxrot glassworks founded in 1827, counts Pernod Ricard, champagne house Dom Perignon and chocolate spreads maker Nutella among its clients.

So-called global coordinators are expected to be mandated later this month or in May for the IPO of Saint-Gobain’s former glass bottle unit, in which Apollo bought a controlling stake in 2015. The listing may happen in September or later, they said.

Apollo and Lazard declined to comment, while Rothschild had no immediate comment.

France has seen few IPOs recently and some deals, such as that of logistics firm Gefco, have been pulled due to wobbly market conditions. Tourism group Club Med’s parent chose Hong Kong for its listing.

Among the few other large French companies which may seek a stock market listing this year is state-owned lottery firm Francaise des Jeux, a stake in which could be sold under a law published last year.

Across Europe initial public offerings slumped in the first quarter to their lowest since the aftermath of the 2008 financial crisis, as uncertainty over Brexit and the U.S.- China trade dispute left companies not wanting to take their chances.

Verallia is expected to post core earnings (EBITDA) of roughly 550 million euros this year and could be valued at between 7 and 8 times that in a potential IPO, the sources said.

Peers such as Vetropack, Owens-Illinois or Vidrala trade in a wide range of 2.7 to 9.4 times EBITDA.

Apollo bought the majority of Verallia in a 2015 deal valuing the business at 2.95 billion euros. It made 16 billion glass bottles and jars last year and is the main supplier of bottles for France’s champagne and cognac industries.

In 2018, the company - which employs nearly 10,000 people - generated 544 million euros in adjusted EBITDA on sales of 2.4 billion.

Earlier this month, Verallia announced the early repayment of some of its debt, citing solid cash flow generation, pushing its net debt down to 1.7 billion euros or 3.1 times core 2018 earnings.

Reporting by Arno Schuetze; Editing by David Holmes

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