Orora preps investors for $1b-plus raising to fund offshore buy

afr.com:

Can and bottle maker Orora is closing in on the acquisition of an offshore glass business, and has begun early preparations for a $1 billion-plus equity raising to bankroll the deal.

Fund managers told this column that equity capital markets bankers from Citi were in the market on Friday, outlining the mooted transaction which would see the $3 billion company significant expand its operating footprint offshore.

The mooted raise and accompanying announcement is expected as early as Monday week (September 4), after reporting season draws to a close, a timeline that is being viewed by potential investors as unusual given ECM bankers typically only start wall-crossing when a deal is imminent.

Orora CEO Brian Lowe told investors last week that EBIT in North America was up 15 per cent. AFR

Fund manager sources said that the size of the mooted acquisition, and the strategic direction in which it would take Orora, had prompted Citi to start preliminary testing of investor appetite ahead of being officially wall-crossed this coming Friday.

(Wall crossing is a strategy used by publicly traded companies to raise capital, where institutional investors are pre-arranged to buy substantial blocks of newly issued stock as part of a confidential offering),

Opera’s interest in expanding through acquisition in North America and Europe has been well flagged, and was discussed at its financial year results last week. However, its last major deal was in 2018, when it paid $US80.5 million ($125.7 million) for Texas-headquartered Pollock Packaging. It now has eight factories in Australasia and 14 in North America. The company is also investing $85 million on a second can line at its facility in Revesby, in Sydney’s western suburbs, in a project