Platinum Equity takes second dividend from BWAY

  • $200 million payout is its second
  • Return is 1.6x the firm’s investment
  • Company likely to be sold next year

Los Angeles-based Platinum Equity put BWAY up for sale in May, according to the Wall Street Journal. The firm hired Goldman Sachs to run the process, the Journal said. A sale of BWAY could fetch $2 billion, Reuters reported.

BWAY is on the block, but Platinum has decided to delay the auction for a few months, a source told sister website peHUB. The company will likely be sold early next year, the person said. Instead, BWAY is currently shopping a $1.1 billion term loan it will use to repay existing debt and fund a special dividend to Platinum, according to Thomson Reuters Loan Pricing Corp. Moody’s Investor Service pegged Platinum’s payout at $200 million.

That is the latest distribution for Platinum. Last year, in May, BWAY issued $250 million in PIK toggle notes that were used to fund a $239 million dividend to Platinum, Moody’s said.

Platinum acquired BWAY, which makes paint cans and aerosol cans, from Madison Dearborn Partners in late 2012. The deal was valued at $1.24 billion. Platinum invested roughly $267.4 million of equity, Moody’s said. With its second dividend, Platinum already has made 1.6x its money.

Quick dividends are not new for Platinum. The firm closed its $1.1 billion buy of Blue Line Rental on Feb. 3. Weeks later the company issued $250 million in PIK notes, peHUB has reported. Blue Line used the new debt to fund a $202 million special dividend for Platinum and to pay down debt at the company, Moody’s said in a February note.

Goldman declined comment. Executives at Platinum and BWAY did not respond to requests for comment.

Luisa Beltran is a senior writer for peHUB.