Ardagh Metal Packaging to Merge with SPAC Gores Holdings V (GRSV)

February 23, 2021 7:54 AM EST

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Ardagh Group S.A. (NYSE: ARD), a global supplier of infinitely-recyclable metal beverage and glass packaging for the world's leading brands, and Gores Holdings V, Inc. (NASDAQ: GRSV, GRSVU and GRSVW), a special purpose acquisition company sponsored by an affiliate of The Gores Group, today announced that they have entered into a definitive business combination agreement under which Gores Holdings V will combine with Ardagh's metal packaging business that will be held by Ardagh Metal Packaging S.A. to create an independent public company. The Company intends to apply to list its shares on the New York Stock Exchange ("NYSE") under the new ticker symbol "AMBP".

Ardagh will retain an approximately 80% stake in AMP and receive up to $3.4 billion in cash in the transactions. Oliver Graham, CEO of Ardagh Metal Beverage, will be CEO of AMP. Paul Coulson, Chairman and CEO of Ardagh, will serve as Chairman and Shaun Murphy, COO of Ardagh, will serve as Vice Chairman of the Company following the closing of the transaction.

AMP is a global leader in the supply of sustainable and infinitely-recyclable beverage cans. The Company has a leading presence in the Americas and Europe and is the second-largest beverage can producer in Europe and the third-largest in North America and Brazil. As the only pure-play beverage can company, AMP products touch billions of consumers worldwide. The Company believes that strong demand in traditional and new beverage categories coupled with environmentally-conscious end consumers are driving an inflection point in beverage can demand and the Company is well positioned to capitalize on these multifaceted growth opportunities. The Company has a compelling financial profile, with a clear and tangible growth trajectory backed by long-term customer contracts and expects to double Adjusted EBITDA from $545 million in 2020 to over $1.1 billion in 2024.

"Ardagh Metal Packaging is benefiting from long-term megatrends, including sustainability and changing consumer preferences," said Paul Coulson, Chairman and CEO of Ardagh. "The business has grown significantly since our acquisition of the metal beverage packaging business in 2016 and we have a clear roadmap that we believe will lead us to more than double Adjusted EBITDA by 2024, as we invest in support of our customers' growth. We are delighted to partner with Gores Holdings V to create a NYSE-listed pure-play beverage can business of scale with impeccable ESG credentials, and we intend to remain a committed, long-term majority shareholder of AMP as it continues its growth journey."

"Over the past five years, our metal packaging business has grown its position as one of the world's leading beverage can producers through our agility and foresight in tapping into emerging consumer and market trends," said Oliver Graham, CEO of AMP. "Our accelerated growth strategy is timely and deepens our connection with our customers as demand for sustainable beverage cans continues to grow."

Alec Gores, Chairman and CEO of The Gores Group and Chairman of Gores Holdings V, said, "Ardagh Metal Packaging has solidified its position as a clear leader in sustainability. The Company has an entrepreneurial owner-manager culture that has led to a successful transformation underpinned by powerful industry dynamics. With a compelling financial profile and clear trajectory for growth, we believe AMP can continue to lead the charge, and we look forward to partnering with Paul Coulson and the team as they continue to execute a targeted expansion strategy supported by highly visible market demand and a strong track record of disciplined and efficient capital deployment."

"Sustainability is an important component of our investment strategy, and AMP is a clear leader in this space—environmentally, ecologically and socially," said Mark Stone, Senior Managing Director of The Gores Group and CEO of Gores Holdings V. "As customers around the world continue to demand sustainable solutions, we believe the Company is strongly positioned to capitalize on the exceptional growth opportunities ahead and we're thrilled to be partnering with the team to do so."

Transaction Overview

The combined company is expected to have an enterprise value of approximately $8.5 billion at closing, representing 10.5x AMP's projected 2022 Adjusted EBITDA. Together with the cash held in Gores Holdings V's trust account, additional investors have committed to participate in the proposed business combination by purchasing 60 million shares of AMP for an aggregate purchase price of $600 million in a private placement (the "PIPE") at $10.00 per share. As a first step in the transaction, AMP will raise new debt of approximately $2.65 billion, (approximately $2.3 billion net), representing a multiple of 3.3x of 2021E pro forma Adjusted EBITDA.

Assuming no share redemptions by the public stockholders of Gores Holdings V, approximately $525 million in cash held in Gores Holdings V's trust account, together with the $600 million in private placement proceeds and approximately $2.3 billion of the new debt raised by AMP, will be used to pay up to $3.4 billion in cash to Ardagh, as well as to pay transaction expenses.

Upon closing of the transactions, assuming no redemptions by Gores Holdings V's public stockholders, Ardagh will retain an equity interest in the Company of approximately 80%, the PIPE investors in the private placement will hold approximately 10% and Gores Holdings V's stockholders and its sponsor will hold approximately 10%.

The proposed business combination, which has been unanimously approved by the boards of directors of both Ardagh and Gores Holdings V, is expected to close in the second quarter of 2021, subject to receipt of Gores Holdings V stockholder approval, the satisfaction of the condition to Ardagh's obligations that it receives at least $3 billion in cash from the transactions and the satisfaction of other customary closing conditions.

Following closing of the business combination, Ardagh currently intends to offer holders of its Class A common shares the opportunity to exchange their Class A common shares for consideration which may include a portion of Ardagh's holding in AMP. Following any such transaction involving such consideration, Ardagh's ownership in AMP would decrease to below 80%, with a corresponding increase in the public float of AMP. The timing and terms of any such transaction, if effected at all, has not been determined.

On closing of these transactions, in addition to its holding in AMP, Ardagh will retain 100% ownership of its glass packaging business as well as its 42% stake in Trivium Packaging BV. The cash proceeds from the transactions will be used to reduce net debt at Ardagh.

Additional information about the transactions, including a copy of the business combination agreement and investor presentation, will be provided in a Current Report on Form 8-K to be filed by Gores Holdings V and in a report on Form 6-K to be filed by Ardagh with the U.S. Securities and Exchange Commission and available at www.sec.gov.

AdvisorsDeutsche Bank Securities Inc. and Morgan Stanley & Co. LLC are acting as financial advisors and capital markets advisors to Gores Holdings V and as joint lead placement agents on the PIPE. Weil, Gotshal & Manges, LLP and Loyens & Loeff N.V. are acting as legal advisors to Gores Holdings V.

Citigroup is acting as exclusive financial advisor to Ardagh and is acting as joint lead placement agent on the PIPE. Shearman & Sterling LLP is acting as legal advisor, to Ardagh.

Investor Conference Call Information Management of Ardagh and Gores Holdings V will host an investor conference call on February 23, 2021 at 9:00 a.m. EST / 6:00 a.m. PST to discuss the proposed business combination. The call can be accessed by dialing +1 (833) 470-1428 (domestic toll-free number) or +1 (404) 975-4839 (international) and providing the access code: 403501.

The conference call will be accompanied by a detailed investor presentation. For interested investors who wish to participate, the conference call and replay details will be available on the "Investors" section of the Ardagh Group website at https://www.ardaghgroup.com/corporate/investors.



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