UPDATE 1-Berry Plastics prices at low end of range
(Adds company background) By Olivia Oran Oct 3 (Reuters) - Container maker Berry Plastics Group Inc
priced its initial public offering at $16 a share on Wednesday, at the low end of its expected range, an underwriter said.
The Apollo Global Management LLC-backed company raised $470.4 million by pricing 29.4 million shares as planned. It had estimated a price range of $16 to $18.
Berry Plastics, based in Evansville, Indiana, is the latest in a slew of companies that Apollo is trying to take public this year. Next week, Apollo-backed real estate services company Realogy is set to price its $1 billion IPO.
Berry Plastics intends use its IPO proceeds to redeem notes due in 2016, it said in its registration filing.
The company had total debt of $4.58 billion as of June 30, giving it a net debt to earnings before interest, tax, depreciation and amortization (EBITDA) leverage ratio of roughly 5.8. That's significantly more than competitors including Aptargroup Inc , Bemis Company Inc , Crown Holdings Inc and Silgan Holdings Inc who all have leverage ratios no greater than 3.1.
The company's high debt load may have made it a tough sell with investors.
"The IPO market is highly selective right now, it's all about small and mid-cap growth names in consumer and tech," said Josef Schuster, founder of Chicago-based IPO research firm IPOX Schuster. "The type of deal where the proceeds aren't going to grow the company just isn't in vogue right now."
Apollo Management and Graham Partners acquired Berry Plastics for $2.25 billion in 2006 from Goldman Sachs Capital Partners and JP Morgan Partners.
Following the offering, Apollo Funds will own about 59.4 percent of the company, while Graham Berry Holdings will have a 5.4 percent stake, Berry Plastics said in the filing.
The company has more than 13,000 customers and recorded a net loss of $212 million on pro forma net sales of $4.8 billion for the year ended June 30.
Apollo's track record with IPOs has been mixed this year. The firm is trying to offload portfolio companies as it looks to market a new fund.
Apollo companies CKE Inc and Momentive Performance Materials Holdings LLC postponed their IPOs earlier this year. Shares of Apollo-backed industrial company Rexnord Corp , which went public in March, are down nearly 9 percent since then.
The Berry Plastics IPO is being led by Bank of America Merrill Lynch, Citigroup, Barclays and Deutsche Bank.
It will list under the New York Stock Exchange under the ticker "BERY."
(Reporting By Olivia Oran; Editing by Bernard Orr and Tim Dobbyn)
((Olivia.Oran@thomsonreuters.com)(646 223 6335))