Firms & Funds

KPS makes 5x in 2.5 years on $1 bln Anchor Glass exit

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Anchor Glass, KPS Capital Partners, merger, private equity, M&A
A worker conducts quality control for wine bottles at Saverglass' wine bottle production line in Ras Al Khaimah March 31, 2014. When French wine and cognac bottle maker Saverglass decided to expand three years ago, it chose a relatively remote, less affluent location in the United Arab Emirates for its plant rather than the business hubs of Dubai and Abu Dhabi. The decision by Saverglass underlines an important shift in the UAE, the Arab world's second biggest economy - a shift with social and political as well as economic implications. Picture taken March 31, 2014. Photo courtesy Reuters/Martin Dokoupil
  • CVC Capital, BA Glass win competitive process
  • KPS grew EBITDA of company by 60 pct
  • Exec said company grew quickly, ready for next stage

 

KPS Capital Partners is seeing a 5x return in its pending sale of Anchor Glass Container to CVC Capital Partners and European glass-bottle producer BA Glass BV, according to a source.

After purchasing the company in 2014 for about $435 million from Ardagh Holdings USA, the firm invested in its six plants and quickly grew EBITDA by about 60 percent during its hold period, this person said. The sale price was more than $1 billion.

Jay Bernstein, partner at KPS, declined to comment on the return multiple or the purchase price of Anchor Glass. He said KPS spotted value in the company that rivals missed.

“Others had questions on the long-term viability of glass, but we had conviction about glass being used for premium packaging,” Bernstein said in a phone call. “It’s been proven. We bought it right and made the business better.”

KPS invested millions in capital improvements in Anchor Glass and worked to provide quick-to-market solutions and new bottle designs, he said. The firm decided to sell the company because it grew quickly and was ready to continue prospering under a new owner, he said.

The deal is expected to close in the fourth quarter.

Paul, Weiss, Rifkind, Wharton & Garrison served as legal counsel and Credit Suisse Securities (USA) and J.P. Morgan Securities served as financial advisers.

The firm invested in Anchor Glass, Tampa, Florida, from KPS Special Situations IV, which raised $3.5 billion.

Action Item: KPS Capital, http://www.kpsfund.com/contact-us

A worker conducts quality control for wine bottles at Saverglass’s wine-bottle-production line in Ras Al Khaimah, United Arab Emirates, on March 31, 2014. Photo courtesy Reuters/Martin Dokoupil