Orora has successfully completed the sale of its North American packaging solutions operation OPS, the deal going through today.
Orora will receive A$1.77bn, which will be A$1.7bn after costs and tax, for the business, which has been bought by Veritiv Corp, a division of private equity fund Clayton, Dubilier and Rice.
The $1.7bn will be used by Orora to pay down debt, and to invest in expanding the company’s cans capacity at its Rocklea plant in Queensland. Orora says the Rocklea expansion, in combination with recent and ongoing projects, will increase its cans capacity by more than 30 per cent.
Orora will also deliver some of the cash to shareholders, in the form of an on-market share buyback. It has committed to buying up to 10 per cent of the shares on issue, some $320m worth.
Brian Lowe, CEO and managing director of Orora said, “Today marks a significant day for Orora – completing the sale of OPS is a critical step forward in our strategy to become a specialised packaging provider for the beverage industry, focusing on our core glass and cans packaging business.”
In the 2024 financial year the OPS business had revenue of US$1.99m, with EBITDA of US$121m. It operated from 66 sites with some 3,500 staff.
Orora says the sale of OPS transforms its business into a focused beverage packaging operation, with leading market positions in most specialised value-added beverage bottle categories, and says the move gives it exposure to higher growth premium spirits and wine categories. It is the ANZ market leader in aluminium cans, with its aggressive cans capacity expansion programme underpinned by long term customer contracts.
Orora’s portfolio has been through significant changes over the past few years, with the sale of its fibre business in 2020, the acquisition of Saverglass last year, and now the sale of OPS. It says its focus on global beverage is a long-held strategy.
Orora says the ongoing premiumisation of its glass business will enable it to capitalise on the trend to drink less but drink better. It holds the number two position in Australasia, and is one of the top three premium glass beverage packaging producers in the world.
Some 73 per cent of Orora's cans are produced for non-alcoholic beverages, and 27 per cent for alcohol. It estimates the total market size around $1.3bn, and says the market is growing at 4-6 per cent per year. Orora has can manufacturing plants in Ballarat, Dandenong, Revesby and Rocklea.
The new owner of OPS, Veritiv Corporation, headquartered in Atlanta, Georgia, is a full-service provider of packaging, jan-san and hygiene products, services and solutions. Additionally, Veritiv provides print and publishing products. It serves customers in a wide range of industries both in North America and globally, and has distribution centres throughout the US and Mexico, and sales teams around the world.
