- Ranpak, the global leader in
sustainable systems‐based packaging solutions for e-Commerce and
industrial supply chains, to become public company through
combination with One Madison Corporation
- Company’s premium fiber-based solution
is well-positioned to benefit from growing momentum in e-Commerce
and increased consumer focus on environmental sustainability
- Fully committed debt and equity
financing in place to complete transaction, including a newly
committed $142 million common equity private placement at $10.00
per share
- Ranpak will have a well-capitalized
balance sheet to support its future growth strategy and benefit
from One Madison’s extensive expertise and network of industrial
and consumer relationships
- One Madison’s investors and strategic
partners include JS Capital and Soros Capital (the family offices
of Jonathan Soros and Robert Soros, respectively), as well as
entities managed by Blackstone Alternative Solutions L.L.C.
- Omar Asali to serve as Executive
Chairman of Ranpak and Mark Borseth to continue as President and
CEO
One Madison Corporation (“OMAD”) (NYSE: OMAD, OMAD.U, OMAD.WS),
a special purpose acquisition company, today announced that it has
signed a definitive agreement with affiliates of Rhône Capital
(“Rhône Capital”) pursuant to which OMAD will combine with Ranpak
Corporation (“Ranpak” or the “Company”). This transaction will
introduce Ranpak as a publicly listed company with an anticipated
enterprise value of approximately $1,089 million1. Upon the closing
of the transaction, OMAD will be renamed and will remain
NYSE-listed under a new ticker symbol.
Ranpak is the global leader in fiber-based, environmentally
sustainable protective packaging solutions that safeguard products
in commerce and industrial supply chains. Ranpak utilizes a
systems-based business model to drive recurring revenue through an
installed platform of over 90,000 machines. Through this platform,
Ranpak sells value-added consumables to end-users via a network of
exclusive distributor relationships, delivering services to
approximately 30,000 diversified end-users in over 40 countries.
Ranpak’s reliability and high-quality offerings have resulted in
strong customer relationships with revenue from recurring customers
and customer retention rates both in excess of 90% over the past
five years.
Ranpak has a demonstrated track record of long-term growth and
stability. The Company achieved a consistent average annual revenue
growth rate of greater than 7% over the past five- and 15-year
periods (adjusted for constant currency)2, while maintaining
attractive Adjusted EBITDA margins of greater than 30%. The
Company’s asset-light operating model supports robust free cash
flow conversion3 of over 80% of Adjusted EBITDA for the past three
years and benefits from a short payback period of approximately 15
months on machine investment. Ranpak expects to continue this
strong performance by targeting revenue growth of 8% in 2019 and
Adjusted EBITDA of $95mm (resulting in a 33% Adjusted EBITDA
margin). Additionally, Ranpak’s business model has proven resilient
in downturns, with the Company delivering increasing free cash flow
(net of total capex) from 2008 to 2009 while maintaining consistent
Adjusted EBITDA.
Ranpak is well-positioned to maintain its organic growth
momentum from global expansion in e-Commerce and the increasing
focus on environmentally sustainable solutions by both distributors
and end-users. Approximately one-third of Ranpak’s sales are
derived from e-Commerce, a market that has expanded at more than a
20% compound annual growth rate in recent years. The Company’s
proprietary solutions and 100%-natural consumable product offering
provide customers with a clear value proposition in supply chain
management and product protection.
“Sustainability is real and here to stay. Customers and
consumers demand eco-friendly solutions for product protection in
both traditional supply chains and e-Commerce,” said Omar Asali,
Chairman and Chief Executive Officer of One Madison Group. “We
launched One Madison Corporation less than a year ago to acquire a
business that met several criteria: a strong brand with leading
market share, a history of innovation, a scalable platform with
organic and strategic growth potential, and strong free cash flow
generation. Ranpak meets and exceeds these criteria with a large
and expanding addressable market, compelling growth opportunities,
and proven financial performance. Ranpak has a tremendous
opportunity to capitalize on trends including increased
environmental awareness and global growth in e-Commerce. We applaud
Ranpak’s management and employees on the business they have built
and look forward to working together with them to take Ranpak to
the next level.”
Following the transaction, the One Madison team will work
closely with Ranpak to identify growth opportunities, deliver its
global network of industrial and consumer relationships, and
provide access to One Madison’s dedicated and experienced M&A
team to assist in sourcing and executing acquisitions. Furthermore,
this transaction will provide additional financial resources to
execute Ranpak’s growth plans, including innovation, geographic
expansion and product line extension.
“We are pleased to welcome One Madison as our new long-term
strategic owner,” said Mark Borseth, President and CEO of Ranpak.
“Omar and his team embrace our products and business strategy and
the importance of continuing to lead in environmental
sustainability, particularly in e-Commerce. We look forward to
working closely with the One Madison team to combine their capital
allocation expertise and deal-making acumen with our unique
asset-light distribution model, track record of innovation, and
industry-leading position to expand our customer base, product
offering, and geographic reach.”
Key Transaction Terms
Under the terms of the transaction, OMAD will acquire Ranpak for
$950 million in cash, including the repayment of existing first
lien and second lien debt. The transaction and related expenses are
expected to be funded with: (i) cash held in trust by OMAD of $300
million; (ii) approximately $407 million of debt drawn from $650
million of committed new debt financing available to fund the
transaction and related expenses on the closing date; and (iii)
approximately $292 million of committed equity investments from
OMAD’s anchor investors. OMAD’s investors and strategic partners
include JS Capital and Soros Capital (the family offices of
Jonathan Soros and Robert Soros, respectively), as well as entities
managed by Blackstone Alternative Solutions L.L.C.
Pro forma for the acquisition, the combined company will have an
anticipated enterprise value of approximately $1.1 billion,
implying a multiple of 11.5x 2019E Adjusted EBITDA of $95 million.
The transaction’s cash proceeds are fully backstopped via the
committed new debt financing.
Post transaction, Omar Asali will serve as Executive Chairman of
Ranpak and Mark Borseth will continue to serve as President and
CEO.
The transaction has been approved by the Boards of Directors of
OMAD and Rhône Capital, and is expected to close in spring 2019,
subject to approval by OMAD shareholders as well as regulatory
approvals and other customary closing conditions.
Advisors and Financing Providers
Citi acted as financial advisor to OMAD and Credit Suisse and
BofA Merrill Lynch acted as capital markets advisors for the
transaction. Goldman Sachs acted as exclusive financial advisor to
Rhône Capital and Ranpak. Davis Polk & Wardwell LLP served as
legal counsel to OMAD and Sullivan & Cromwell LLP acted as
legal advisor to Rhône Capital and Ranpak.
The transaction includes committed debt financing from The
Merchant Banking Division of Goldman Sachs.
Investor Call and Webcast Details
Investors may listen to a conference call regarding the proposed
transaction at 10:00 AM EST today, December 13, 2018. The call may
be accessed by dialing (866) 547-1509 toll-free in the U.S. or
(920) 663-6208 internationally and participants should provide
Conference ID number 6778435. An investor presentation discussed on
the call is available on OMAD’s website at
http://www.onemadisoncorp.com/corporate-governance--investor-relations.html
A webcast of the call can be accessed at
https://event.on24.com/wcc/r/1900228-1/311F201D07FFAFBD0997F74B81EE4EE7.
The call will be available for replay at 1:00 PM EST today until
midnight on December 27, 2018 by dialing (800) 585-8367 toll-free
in the U.S. or (404) 537-3406 internationally. The webcast will be
archived and available for viewing for 90 days beginning at 12:00
PM EST today at
https://event.on24.com/wcc/r/1900228-1/311F201D07FFAFBD0997F74B81EE4EE7.
About One Madison Corporation
OMAD is a special purpose acquisition company launched in 2018
for the purpose of effecting a merger, share exchange, asset
acquisition, share purchase, reorganization or similar business
combination with one or more businesses. OMAD began trading on NYSE
in January 2018 and its Class A ordinary shares, units and warrants
trade under the ticker symbols OMAD, OMAD.U, and OMAD.WS,
respectively. OMAD is sponsored by One Madison Group LLC, an
investment firm founded by Omar Asali, formerly President and Chief
Executive Officer of HRG Group. One Madison’s investors and
strategic partners include JS Capital and Soros Capital (the family
offices of Jonathan Soros and Robert Soros, respectively), as well
as entities managed by Blackstone Alternative Solutions L.L.C.
About Ranpak
Founded in 1972, Ranpak's goal was to create the first
environmentally responsible system to effectively protect products
during shipment. The development and improvement of materials,
systems and total solution concepts have earned Ranpak a reputation
as an innovative leader in e-commerce and industrial supply chain
solutions. Ranpak is headquartered in Concord Township, Ohio and
has approximately 550 employees.
About Rhône
With over 20 years of investing experience, Rhône Capital and
its affiliates (“Rhône”) comprise a global alternative investment
management firm with more than $5 billion in assets under
management. The firm focuses its private equity investments in
market leading businesses with a pan-European or transatlantic
presence and global growth opportunities. Rhône Capital, which is
currently investing capital from its fifth private equity fund, has
invested in a diversified portfolio of companies, including those
in the chemical, consumer product, food, packaging, industrials,
specialty material, business services, and transportation
sectors.
Additional Information
In connection with the proposed acquisition, One Madison will
file a proxy statement with the Securities and Exchange Commission
(the “SEC”). STOCKHOLDERS ARE ADVISED TO READ THE PROXY
STATEMENT WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN
IMPORTANT INFORMATION. Stockholders may obtain a free copy of the
proxy statement (when available) and any other relevant documents
filed with the SEC from the SEC’s website
at http://www.sec.gov. In addition, stockholders will be able
to obtain, without charge, a copy of the proxy statement and other
relevant documents (when available) at One Madison’s website at
http://www.onemadisoncorp.com/corporate-governance--investor-relations.html
or by contacting One Madison’s investor relations department via
e-mail at info@onemadisongroup.com.
Participants in the Solicitation
One Madison and its directors, executive officers and other
members of its management and employees may be deemed to be
participants in the solicitation of proxies from One Madison’s
stockholders with respect to the proposed acquisition. Information
about One Madison’s directors and executive officers and their
ownership of One Madison’s common stock is set forth in One
Madison’s filing with the SEC on (i) Form S-1, dated as of October
13, 2017, as amended on January 5, 2018 and (ii) Form 10-K, dated
as of March 29, 2018, as supplemented by the Reports on Form 8-K
filed on May 23, 2018 and September 13, 2018. Stockholders may
obtain additional information regarding the direct and indirect
interests of the participants in the solicitation of proxies in
connection with the proposed acquisition, including the interests
of One Madison’s directors and executive officers in the proposed
acquisition, which may be different than those of One Madison’s
stockholders generally, by reading the proxy statement and other
relevant documents regarding the proposed acquisition, which will
be filed with the SEC.
USE OF NON-GAAP FINANCIAL MEASURES
This press release includes non-GAAP financial measures for
Ranpak, including Adjusted EBITDA and free cash flow. Ranpak
believes presentation of these non-GAAP measures is useful because
they allow management to more effectively evaluate its operating
performance and compare the results of its operations from period
to period and against its peers without regard to financing methods
or capital structure. Management does not consider these non-GAAP
measures in isolation or as an alternative to similar financial
measures determined in accordance with GAAP. The computations of
EBITDA, adjusted EBITDA and free cash flow may not be comparable to
other similarly titled measures of other companies. These non-GAAP
financial measures should not be considered as alternatives to, or
more meaningful than, measures of financial performance as
determined in accordance with GAAP or as indicators of operating
performance. Ranpak is not in a position to reasonably estimate the
expected GAAP net income (loss) for fiscal year 2019. However, it
expects to generate a GAAP net loss for such period.
USE OF PROJECTIONS
This press release includes financial estimates and projections,
including with respect to Ranpak’s estimated revenues, net income,
EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, free cash flow and
free cash flow conversion for future periods. Neither Ranpak’s
independent auditors, nor the independent registered public
accounting firm of the Company, have audited, reviewed, compiled,
or performed any procedures with respect to the estimates and
projections for the purpose of their inclusion in this press
release, and accordingly, neither of them expressed an opinion or
provided any other form of assurance with respect thereto for the
purpose of this press release. You should not place undue reliance
on these estimates and projections as they may not necessarily be
indicative of future results.
The assumptions underlying estimated and projected financial
information are inherently uncertain and are subject to a wide
variety of significant business, economic and competitive risks and
uncertainties that could cause actual results to differ materially
from those contained in the prospective financial information.
Accordingly, there can be no assurance that the estimated and
projected results are indicative of the future performance of
Ranpak or the Company or that actual results will not differ
materially from those estimated or projected results presented.
Inclusion of the estimated and projected financial information in
this press release should not be regarded as a representation by
any person that the results contained in the estimated and
projected financial information will be achieved.
CAUTION ABOUT FORWARD-LOOKING STATEMENTS
The information in this press release may contain
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933, as amended (the “Securities
Act”), and Section 21E of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”). Our forward-looking
statements include, but are not limited to, statements regarding
our or our management team’s expectations, hopes, beliefs,
intentions or strategies regarding the future. Statements that are
not historical facts, including statements about the pending
transaction among One Madison Corporation (“OMAD”), Rack
Holdings L.P. and Rack Holdings Inc. (“Ranpak”) and the
transactions contemplated thereby, and the parties, perspectives
and expectations, are forward-looking statements. In addition, any
statements that refer to estimates, projections, forecasts or other
characterizations of future events or circumstances, including any
underlying assumptions, are forward-looking statements. The words
“anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,”
“intend,” “may,” “might,” “plan,” “possible,” “potential,”
“predict,” “project,” “should,” “would” and similar expressions may
identify forward-looking statements, but the absence of these words
does not mean that a statement is not forward-looking.
Forward-looking statements in this press release may include, for
example, statements about: our ability to complete our initial
business combination; our expectations around the performance of
the prospective target business or business; our success in
retaining or recruiting, or changes required in, our officers, key
employees or directors following our initial business combination;
our officers and directors allocating their time to other
businesses and potentially having conflicts of interest with our
business or in approving our initial business combination; the
proceeds of the forward purchase shares being available to us; our
potential ability to obtain additional financing to complete our
initial business combination our public securities’ potential
liquidity and trading; the lack of a market for our securities; the
use of proceeds not held in the trust account or available to us
from interest income on the trust account balance; the trust
account not being subject to claims of third parties; or our
financial performance following this offering.
The forward-looking statements contained in this press release
are based on our current expectations and beliefs concerning future
developments and their potential effects on us taking into account
information currently available to us. There can be no assurance
that future developments affecting us will be those that we have
anticipated. These forward-looking statements involve a number of
risks, uncertainties (some of which are beyond our control) or
other assumptions that may cause actual results or performance to
be materially different from those expressed or implied by these
forward-looking statements. These risks include, but are not
limited to: (1) the occurrence of any event, change or other
circumstances that could give rise to the termination of
negotiations and any subsequent definitive agreements with respect
to the initial business combination; (2) the possibility that the
terms and conditions set forth in any definitive agreements with
respect to the initial business combination may differ materially
from the terms and conditions set forth herein; (3) the outcome of
any legal proceedings that may be instituted against OMAD, Ranpak
or others following the announcement of the initial business
combination and any definitive agreements with respect thereto; (4)
the inability to complete the initial business combination due to
the failure to obtain approval of the stockholders of OMAD, to
obtain financing to complete the initial business combination or to
satisfy other conditions to closing in the definitive agreements
with respect to the initial business combination; (5) changes to
the proposed structure of the initial business combination that may
be required or appropriate as a result of applicable laws or
regulations or as a condition to obtaining regulatory approval of
the initial business combination; (6) the ability to meet NYSE’s
listing standards following the consummation of the initial
business combination; (7) the risk that the initial business
combination disrupts current plans and operations of Ranpak as a
result of the announcement and consummation of the initial business
combination; (8) costs related to the initial business combination;
(9) changes in applicable laws or regulations; (10) the possibility
that Ranpak or the combined company may be adversely affected by
other economic, business, and/or competitive factors; and (11)
other risks and uncertainties indicated from time to time in
filings made with the SEC. Should one or more of these risks or
uncertainties materialize, they could cause our actual results to
differ materially from the forward-looking statements. We are not
undertaking any obligation to update or revise any forward-looking
statements whether as a result of new information, future events or
otherwise. You should not take any statement regarding past trends
or activities as a representation that the trends or activities
will continue in the future. Accordingly, you should not put undue
reliance on these statements.
1 Assumes 69 million shares outstanding (including promote
shares, net of earn-out shares), at a share price of $10.00 per
share, and $399 million net debt.
2 Based on constant currency at € / $ 1.15. 2014 to 2017 results
are pro forma for the e3neo acquisition. Based on unaudited revenue
prior to 2015.
3 Free cash flow conversion defined as (Adjusted EBITDA less
Maintenance Capex) / Adjusted EBITDA.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20181213005216/en/
Investors:Bharani BobbaChief Financial
Officer212-763-0930Media:Sard Verbinnen & Co.George
Sard/Jamie Tully/David Millar212-687-8080
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