OTPP's Trivium adds to busy packaging auction pipeline

Joao Grando
06 December 2021

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The owners of Trivium Packaging are getting ready for a sale process expected to kick off early next year, according to two sources familiar with the situation.

Advisers at Citi and Evercore will be guiding the global metal packaging group on an upcoming auction, the sources said, with one adding that fireside chats with potential bidders are due to start imminently.

A formal sale, with the distribution of information packages, is expected to launch towards the end of January, one of the sources said.

Trivium, which is specialised in metal containers primarily for the food and aerosols markets, was created in 2019 via the combination of Ardagh Group's Food & Specialty Metal Packaging unit with Exal Corporation, which was backed by Ontario Teachers' Pension Plan (OTPP).

OTPP holds a majority stake in Trivium, while Ardagh has around 42% of the shares, according to the latter's website.

Ardagh, Citi, Evercore and OTPP declined to comment. Trivium did not reply to requests for comments.

Trivium generated USD 405m in EBITDA from revenues of USD 2.65bn in 2020, according to its annual report.

Over the first nine months of 2021, the company posted USD 324m in EBITDA, up from USD 319m over the same period in 2020, while revenues were at USD 2.08bn, compared to USD 2.02bn in the previous period.

Excluding favourable foreign currency effects, revenues decreased by USD 34m and adjusted EBITDA by USD 9m, primarily as a result of lower sales due to a cybersecurity incident that affected many of the company's core IT systems in May. This was partly offset by higher selling prices relating to the pass-through of increased input costs, according to the financial report.

Bidder universe
The upcoming sale is the latest addition to the 2022 pipeline of large European packaging deals, which already includes the expected auction of 3i Group's Weener Plastics in H2, as reported by Mergermarket.

Trivium's process is likely to draw comparisons with the sale of Crown Holdings' European food can business earlier this year, with a similar set of bidders expected to look, the two sources said.

That asset, which ended up in the hands of KPS Capital Partners for an EBITDA multiple of around 10x, attracted the attention of sponsors such as Lone Star Funds, Onex and Platinum Equity, which was looking via portfolio company Ball Metalpack, as reported.

However, sponsors could find it more difficult to identify an interesting equity story in Trivium, which is seen as an already well-run business operating in a space with flat but steady growth, one of the sources said.

The Crown Holdings cans unit, on the other hand, was a carve-out and was viewed by some as a turnaround case, which potentially offered a better upside, this source said.

Like with the Crown Holdings process, which saw the involvement of Sonoco, Trivium could also see interest from industry players, one of the sources said. However, its size – with EBITDA more than 50% larger than the Crown's unit – could prove an obstacle for trade bidders, this source said.