global packaging m&a - intercontinental deal strategies ... · the presentation (including the...

Global packaging M&A - intercontinental

deal strategies: evanescent or inevitable?

Nicholas Mockett, Moorgate Capital

1. Industry Performance

2. Recent M&A transactions

3. Outlook

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Moorgate Capital 2

Outline

Moorgate Capital is an independent Corporate Finance firm specialising in:

• Mergers, Acquisitions & Disposals

• Buy Outs

• Capital Raising

• Strategic Advice

• Public Company Advice & Fairness Opinions


Moorgate Capital 3

Moorgate Capital

Clients benefit from:

Focus on upper-mid market: Enterprise Value US$50m – US$1bn

Our investment in long term relationships

Lack of conflicts of interest

Deep sector knowledge globally

Industry specific Panel of Senior Advisors

Clients include multinational public companies, leading financial sponsors, private companies, family offices, management teams, banks and state owned enterprises.


Moorgate Capital 4

Pulp & paper expertise

North American Pulp & Paper Conference Oct-19 Seaport Hotel, Boston, USA

Latin American Pulp & Paper Conference Aug-19Renaissance Hotel, Sao Paulo, Brazil

Tissue 2018 Oct-18Fox Cities Exposition Center, Appleton, USA

Pulp & Paper International Nov-17Royal Museum of Arts, Brussels, Belgium

Pulp & Paper International Nov-16 Royal Hotel, Brussels, Belgium

Asian Forest Products Summit Jun-16Four Seasons Hotel, Shanghai, China

18th Annual European Conference Mar-16 Radisson, Berlin, Germany

Latin American Pulp & Paper Conference Aug-14Intercontinental Hotel, Sao Paulo, Brazil

Latin American Paper Packaging Conference Nov-13 Eden Roc, Miami, Florida, USA

http://domesticfuel.com/wp-content/uploads/2011/07/RISI-LOGO.jpg





Moorgate Capital 5

Key contacts

Sir Peter Heap Chairman

[email protected] Tel: +44 20 7060 7017

Sir Peter was with the Foreign & Commonwealth Office of the British Government for over thirty years,including being the Ambassador in Brazil, Senior Trade Commissioner in Hong Kong, British HighCommissioner, Bahamas, as well as the Head of Energy Department. Subsequently he worked full timewith HSBC Investment Bank and as senior adviser or Non Executive of a number of other companiesincluding Amerada Hess and BOC Group. Sir Peter is Chairman Emeritus of the Brazilian Chamber ofCommerce in Great Britain.

Nicholas Mockett Industry Partner

[email protected] Tel: +44 20 7060 7005

Nick has focused exclusively on the Paper & Packaging related industries for twenty five years and hisexperience includes leveraged buy outs, acquisitions, disposals, and take privates. He has advised onseveral billion Dollars of transactions. Prior to Moorgate Capital he spent 4 years with Europa Partners and8 years with PwC Corporate Finance where he was Sector Leader for the PPP industry. Nick is a Liverymanof the Worshipful Company of Stationers & News Paper Makers and Judge of the annual Packaging NewsAwards.

mailto:[email protected]

mailto:[email protected]



3. Outlook


Moorgate Capital 6

Outline

7


Moorgate Capital 7

10 year share price performance

2011 2012 2013 2014 2015 2016 2017 2018 20192010

300%

100%

0%

200%

US PAPER PACKAGING+ 294.52 %

US CCONTAINERS& PACKAGING+ 193.31 %

Publiccompanyindices

8


Moorgate Capital 8


2011 2012 2013 2014 2015 2016 2017 2018 20192010

300%

100%

0%

200%



DOW JONES+ 175.63 %

FTSE 100 + 39.28 %


9


Moorgate Capital 9


2011 2012 2013 2014 2015 2016 2017 2018 20192010

300%

100%

0%

200%



DOW JONES+ 175.63 %

FTSE 100 + 39.28 %


Burgundy + 263%

10


Moorgate Capital 10

EV/EBITDA valuationsP

ape

r p

acka

gin

g

Pla

stic

pac

kagi

ng

7.4 x 7.5 x7.0 x

8.8 x8.5 x 8.4 x

9.3 x9.6 x

8.3 x

9.0 x

8.0 x

9.0 x

9.8 x10.2 x

10.8 x 11.0 x

10.1 x

10.9 x

0 x

2 x

4 x

6 x

8 x

10 x

12 x

2010 2011 2012 2013 2014 2015 2016 2017 2018

Publiclytradedcompanies



3. Outlook


Moorgate Capital 11

Outline

12


Moorgate Capital 12

Global Packaging M&A

Dealvolume

0

100

200

300

400

500

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

13


Moorgate Capital 13

Transactions by buyer & seller

Buyer type

Strategic (private) 35 %Strategic (public) 31 %PE add on 19 %PE platform 15%

Seller type

Paper & board 36 %Rigid plastics 26 %Flexible plastics 24%Metal 4%Glass 2%Other 8%

15%

19%

31%

35%

8%2%

4%

24%

26%

36%

14


Moorgate Capital 14

Global M&A: paper packaging

acquired by acquired by acquired by

acquired by acquired by acquired by acquired by acquired by

acquired by acquired by

Sept 2019 Aug 2019 Jun 2019

Apr 2019 Feb 2019 Dec 2018 Nov 2018 Oct 2018

Jul 2019 Apr 2019

2 corrugated packaging facilities

15


Moorgate Capital 15

Global M&A: paper packaging




Sept 2019 Aug 2019 Jun 2019

Apr 2019 Feb 2019 Dec 2018 Nov 2018 Oct 2018

Jul 2019 Apr 2019

2 corrugated packaging facilities

INTER-CONTINENTALCONTINENTALLOCAL

16


Moorgate Capital 16

Global M&A: pulp & paper




Sept 2019 Sept 2019 May 2019

Oct 2018 Aug 2018 May 2018 May 2018 Feb 2018

Aug 2019 Apr 2019

33% stake

Marperger Group

Canadian mill Majority stake Co-investment

Old Town, Maine Pulp Mill (OTM)

Wickliffe mill

17


Moorgate Capital 17

Global M&A: pulp & paper




Sept 2019 Sept 2019 May 2019

Oct 2018 Aug 2018 May 2018 May 2018 Feb 2018

Aug 2019 Apr 2019

33% stake

Marperger Group

Canadian mill Majority stake Co-investment

Old Town, Maine Pulp Mill (OTM)

Wickliffe mill

INTER-CONTINENTALCONTINENTALLOCAL

18


Moorgate Capital 18

EV/EBITDA valuations: paper packaging

M&Atransactionmultiples

8.2 x

6.6 x

5.8 x 5.9 x 5.9 x

9.8 x

11.4 x

8.1 x

6.3 x

4.8 x

5.9 x

8.5 x

6.4 x6.8 x 6.9 x

7.8 x

6.3 x

9.0 x

10.7 x

0 x

2 x

4 x

6 x

8 x

10 x

12 x

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018



3. Outlook


Moorgate Capital 19

Outline

20


Moorgate Capital 20

Deal drivers

1. 6.

2. 7.

3. 8.

4. 9.

5. 10.

Environmental influence

Urbanisation

Convenience & on the go

Smaller pack sizes

Branding

Health conscious

Internet retailingWorking mothers

Single people households

LOCAL Shopping locally

MICRO TRENDSMACRO TRENDS

1.

Growing population & middle class

2.

Ageing population

3.

Growing protein demand

$

21


Moorgate Capital 21

Anti-plastics sentiments

22


Moorgate Capital 22

Private equity dry powder

$ 0 bn

$ 250 bn

$ 500 bn

$ 750 bn

$ 1,000 bn

$ 1,250 bn

$ 1,500 bn

$ 1,750 bn

$ 2,000 bn

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

~ $ 2 trillionPE cashreserves

23


Moorgate Capital 23


U. A. E.

NORWAY SINGAPORE

SWITZERLAND

24


Moorgate Capital 24


U. A. E.

NORWAY SINGAPORE

SWITZERLAND

x 2 !

25


Moorgate Capital 25

Recent changes in merger legislation

Canada Adjusts Threshold of "Size-of-Target" Test

UK Issues First Order Reversing Pre-Closing Integration and Draft Guidance on No-Deal Brexit

United States Adjusts Notification Thresholds

Mexico Adjusts Notification Thresholds

Angola Launches New Competition Regulator

India Amends Merger Control Regime

Ireland Proposes Introduction of Simplified Procedure

Israel Revises Notification Thresholds

Morocco's Competition Council Becomes Fully Operational

Philippines Issues Guidelines on Notification of Joint Ventures

Thailand's Merger Control Regime Becomes Fully Operational

Ecuador Adjusts Notification Thresholds

Australia Prosecutes Its First Gun Jumping Case

Nigeria Introduces New Competition Regime

Ukraine Plans to Exclude Sellers from Notification Thresholds

26


Moorgate Capital 26

Changes in interest rates

BoE The FedECB

Current 0.75% 0 % 2 %

1 year

10 years

0.75 %

0.5 %

0 %

2.5 %

1.5 %

1.75 %

0.25 %

2.25 %

0 %

2.5 %

0.25 %



3. Outlook


Moorgate Capital 27

Summary

Continued M&A with intercontinental deal strategies inevitable

Activity from both strategic and financial acquirors

Macro and micro indicators remain robust

? Valuations

? Changes in interest rates and cost of capital

Stock market performance remains strong

Strong performance supports investor appetite

? New legislation

? Recession

Continued deal appetite

28


Moorgate Capital 28

Moorgate Capital

DisclaimerThis presentation was prepared by Moorgate Capital (Corporate Finance) Ltd. (“Moorgate Capital”). This presentation is incomplete without reference to, and should be viewed solely inconjunction with, the oral briefing provided by Moorgate Capital. The presentation (including the briefing) is proprietary to Moorgate Capital and may not be disclosed to any third partyor used for any other purpose without the prior written consent of Moorgate Capital.

The information in this presentation reflects prevailing conditions and our views as of this date, which are accordingly subject to change. In preparing this presentation, we have reliedupon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was otherwise reviewed by us. In addition,our analyses are not and do not purport to be appraisals of assets, stocks or businesses. Even when this presentation contains a kind of appraisal, it should be considered preliminary,suitable only for the purpose described herein and not be disclosed or otherwise used without the prior written consent of Moorgate Capital.

33 St James's Square

London

SW1Y 4JS

Tel: +44 20 7060 7007

Fax: +44 20 7060 7009

www.moorgate-capital.com

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