Clondalkin Announces Successful Long-term Financing

AMSTERDAM—July 22, 2013—Leading international producer of high value added packaging products and services Clondalkin Group has completed a highly successful seven year refinancing of its debt and is well placed to continue with its progressive development plans.

The refinancing is one of the biggest composite transactions in packaging this year and has been well remarked in the finance markets. It included the sale of two non-core businesses for €145 million and debt repayments of €585 million. The Group secured €350 million of new financing in the North American Term Loan B (TLB) markets, and launched a successful Receivables securitization program alongside the TLB illustrating strong asset based lending capability.

The Rating Agencies have responded very positively to the refinancing, with Standard & Poor’s upgrading the rating and Moody’s moving to positive outlook.

Group Finance Director Colman O’Neill stated, “The refinancing is a tremendous achievement for the Group and we are delighted with the outcome. Clondalkin has successfully financed its business in the public and debt markets for over 13 years; with four significant re-financings in that time, moving from the bank markets to mainly European note markets and this time the refinancing has been achieved in the Term Loan B North American markets. It reflects very well on Clondalkin financial track record that we were able to move seamlessly from the European to the U.S. loan markets.”

O’Neill continued to explain that the company sold two non-core businesses for €145 million, representing over 7.25 times’ multiple of 2012 EBITDA in order to focus on higher value added products in preferred growth opportunities, and to de-leverage our balance sheet, ahead of the refinancing. Both business units were very well managed, non-core operations, with limited synergies with the rest of the Group, albeit with good development prospects in the right ownership. In addition, both were acquired by trade players and were incremental to their businesses.

“Our principal borrowings have been reduced by €235 million,” O’Neill added. “Our new €350 million debt has a seven-year term with flexible and mainly end of term repayment. We have included several attractive path finder features in the financing which work well for us and the financiers.” The all in cost of financing across the whole finance package is approximately 6.5 percent per year. Cross currency swaps have been implemented to convert the debt into mainly dollar, euro and sterling to reflect Clondalkin Group’s earnings and cash flows. “We maintain strong liquidity at over €60 million between cash balances and revolver facilities,” he said.

“We appreciate the support of Deutsche Bank, Goldman Sachs, Bank of America Merrill Lynch and ING Bank and our advisors,” O’Neill concluded. “It was great execution, timing and coordination across a lot of different elements.”

“The successful refinancing gives us a lot of financial flexibility and a great base to continue our ambitious development plans,” added Clondalkin CEO Norbert McDermott. “We have invested over €120m in our operations in the last three years to lay the foundation for business expansion.” Clondalkin Group will be continuing its strong focus on developing innovative packaging products and features in partnership with its customers. McDermott reported that the company has earned multiple leading market positions. “We have the commitment and capability to build on these in the coming years,” he said.

About Clondalkin Group
Clondalkin Group is a value-added packaging business with a broad and diversified geographic footprint. It’s a market leader in secondary healthcare packaging and holds leading positions in flexible packaging markets in foils and laminate packaging with strong and long lasting customer relationships. The group has 35 manufacturing locations in eight countries, 4,000 employees and annual sales of €700 million.

Source: Clondalkin Group.

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