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Berry Global Group, Inc. Announces Agreement to Acquire the Clopay Plastic Products Company, Inc., from Griffon Corporation

  • Adds highly complementary products, geographic footprint, and customers, further enhancing our ability to accomplish our mission of “Always Advancing to Protect What’s Important”
  • Expands Berry’s scope into faster growing health and hygiene markets
  • Value creating for Berry shareholders

EVANSVILLE, Ind.--(BUSINESS WIRE)-- Today, Berry Global Group, Inc. (“Berry”) (NYSE: BERY) announced that it has entered into a definitive agreement to acquire the Clopay Plastic Products Company, Inc. (“Clopay”), a subsidiary of Griffon Corporation (NYSE:GFF), for $475 million in cash on a debt-free, cash-free basis.

Clopay 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 a number of markets including; hygiene, healthcare, construction and industrial protective apparel. Clopay has nearly 1,500 employees with a footprint serving markets across the globe with locations in the United States, Germany, Brazil, and China. Clopay delivered $461 million in sales and $53 million in operating EBITDA for its fiscal year ended September 30, 2017. We expect annual cost synergies to be approximately $20 million. The purchase price, including our expected cost synergies along with the tax basis step-up value, represents an adjusted EBITDA multiple of below 6 times.

“The proposed acquisition of Clopay is directly aligned with our fundamental strategic initiatives,” said Tom Salmon, CEO of Berry. “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.”

Select Benefits of the Transaction

Complementary products. Together we will be able to optimize complementary production capacities, reduce material and conversion costs, and better serve customers from an expanded global footprint with a portfolio of products that is one of the most comprehensive in the industry.

Faster growing markets. Increases Berry’s position within the faster growing health and hygiene markets using innovative patent protected technologies.

Significant, clearly identifiable cost synergies. Berry expects to realize cost synergies in line with previous Berry acquisitions of a similar nature.

Approvals, Closing, and Funding Considerations
The transaction is expected to be completed in early 2018, subject to customary closing conditions, including applicable regulatory approvals. Berry intends to fund the acquisition with existing liquidity or additional debt offering.

About Berry
Berry is committed to its mission of ‘Always Advancing to Protect What’s Important,’ and proudly partners with its customers to provide them with value-added customized protection solutions. The Company’s products include engineered materials, non-woven specialty materials, and consumer packaging. Berry’s world headquarters is located in Evansville, Indiana. With net sales of $7.1 billion in fiscal 2017, Berry, a Fortune 500 company, is listed on the New York Stock Exchange under the ticker symbol BERY. For additional information, visit Berry’s website at www.berryglobal.com.

Clopay Reconciliation Schedule

(Unaudited)

Fiscal Year 2017
Segment operating income $ 25
Depreciation and amortization 28
Segment operating EBITDA 53
Berry’s expected annual cost synergies 20
Adjusted EBITDA $ 73

Non-GAAP Financial Measures
This press release refers to Clopay’s operating EBITDA , which is not a measure determined in accordance with accounting principles generally accepted in the United States of America (GAAP). For further information regarding Clopay’s results, including a reconciliation of non-GAAP financial measures to comparable GAAP measures, see the earnings release of Griffin Corporation issued earlier today. As used herein, Clopay’s operating EBITDA refers to the same measure defined in Griffin Corporation’s earnings release as Clopay’s “Segment operating EBITDA.” Non-GAAP measures should be viewed as supplements to, rather than substitutes for comparable measures under GAAP.

Forward Looking Statements
Statements in this release that are not historical, including statements relating to the expected future performance of the Company, are considered “forward looking” and are presented pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements because they contain words such as “believes,” “expects,” “may,” “will,” “should,” “would,” “could,” “seeks,” “approximately,” “intends,” “plans,” “estimates,” “anticipates” “outlook,” or “looking forward,” or similar expressions that relate to our strategy, plans or intentions. All statements we make relating to our estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates and financial results or to our expectations regarding future industry trends are forward-looking statements. In addition, we, through our senior management team, from time to time make forward-looking public statements concerning our expected future operations and performance and other developments. These forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore, our actual results may differ materially from those that we expected.

Important factors that could cause actual results to differ materially from our expectations, which we refer to as cautionary statements, are disclosed under “Risk Factors” and elsewhere in our Annual Report on Form 10-K and subsequent filings with the Securities and Exchange Commission, including, without limitation, in conjunction with the forward-looking statements included in this release. All forward-looking information and subsequent written and oral forward-looking statements attributable to us, or to persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements. Some of the factors that we believe could affect our results include: (1) risks associated with our substantial indebtedness and debt service; (2) changes in prices and availability of resin and other raw materials and our ability to pass on changes in raw material prices on a timely basis; (3) the impact of potential changes in interest rates: (4) performance of our business and future operating results; (5) risks related to our acquisition strategy and integration of acquired businesses; (6) reliance on unpatented know-how and trade secrets; (7) increases in the cost of compliance with laws and regulations, including environmental, safety, and production and product laws and regulations; (8) risks related to disruptions in the overall economy and the financial markets may adversely impact our business; (9) catastrophic loss of one of our key manufacturing facilities, natural disasters, and other unplanned business interruptions; (10) risks of competition, including foreign competition, in our existing and future markets;(11) general business and economic conditions, particularly an economic downturn; (12) potential failure to realize the intended benefits from recent acquisitions, including, without limitation, the inability to realize the anticipated cost synergies in the anticipated amounts or within the contemplated timeframes or cost expectations, the inability to realize the anticipated revenues, expenses, earnings and other financial results, and growth and expansion of the company’s operations as a result of the transaction, and the anticipated tax treatment; (13) risks related to international business, including foreign currency exchange rate risk and the risks of compliance with applicable export controls, sanctions, anti-corruption laws and regulations, (14) the risk that the conditions to closing of the transaction may not be satisfied; and (15) the other factors discussed in the under the heading “Risk Factors” in our Annual Report on Form 10-K and subsequent filings with the Securities and Exchange Commission. We caution you that the foregoing list of important factors may not contain all of the material factors that are important to you. Accordingly, readers should not place undue reliance on those statements. All forward-looking statements are based upon information available to us on the date of this release. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

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Berry Global Group, Inc.
Dustin Stilwell, 812-306-2964
ir@berryplastics.com

Source: Berry Global Group, Inc.