watch this space, page-7

I think the buy side will pick up as people think PPG fits into PACT. those that are closer would understand that the two businesses are very different. I still believe that Ruffy will leave PPG seperate see article below. Reason being as the business is different PPG can actually replicate what he has done in the rigid plastic's game through consolidation and acquisition in the fragmented industrial packaging space. Again See article below!

Geminder eyes Pact transformation
By Damon Kitney - The Australian31 Oct, 6:54 AMDataRoomIndustriesProfessional ServicesBy Damon Kitney - The Australian

Melbourne packaging billionaire Raphael Geminder wants to transform his Pact Group into a $5 billion enterprise over the next five years, with operations in Asia, Europe and the US, and will retain a stake of up to 40 per cent in the business if it is floated on the Australian Securities Exchange before the end of the year.

The Australian understands the Pact advisory board, which includes independent non-executive directors Peter Margin, Lyndsey Cattermole and Tony Hodgson, will make a decision within a fortnight whether to proceed with a float, which will value the packaging business at about $2 billion.

Mr Geminder, Pact Group's chairman, is believed to want to retain a stake of up to 40 per cent to allow him to continue to have a substantial say in the business while enabling a sufficient free float to provide a liquid market in the shares.

The board is expected to add one additional non-executive director to the new public company if the float proceeds.



Mr Geminder, the son-in-law of the late packaging magnate Richard Pratt, appointed Credit Suisse and Macquarie Capital a month ago to restart plans for public offering after the process was abandoned three years ago because of volatile equity markets.

If it proceeds, the float will give Pact the opportunity to raise external capital to help meet its longer-term goal of becoming a $5 billion enterprise, a vision outlined to staff last year as Pact's so-called 5 cubed strategy. "5 cubed" will see the company in the short-term look to expand its Asian operations, which currently include plants in China and Thailand.

This could include ventures with current international partners such as multinational Unilever.

Pact also has longer-term aspirations to move into Europe and the US, but only at the right price.

But it is believed a portion of the proceeds of the float will also be used to immediately pay down debt after the group raised almost $1bn in June in the US Term Loan B (TLB) market.

Pact raised $US885 million ($931 million) in senior debt and a further $75 million and $NZ30 million ($26 million) in separate revolving facilities.

The offer was more than three times oversubscribed.

The extensive documentation undertaken for that raising is understood to have helped Pact push ahead with the work on a public listing.

It comes as rival Amcor moves ahead with plans to demerge its Australasian packaging arm, Amcor Australasia & Packaging Distribution, or AAPD, before the end of the year.

It also comes as another member of the Pratt family, Alex Waislitz, prepares to manage public money for the first time through a listed vehicle, Thorney Opportunities.

Mr Waislitz recently raised $56 million through a placement to sophisticated or professional investors for a new activist fund.

A number of other privately owned businesses and those held by private equity owners are looking at IPOs before the end of the year to take advantage of favourable equity markets. However, none are family businesses like Pact.

Pact's current sole shareholder is Pact Group Holdings, which, in turn, is owned by Mr Geminder's Geminder Holdings. Mr Geminder's wife Fiona also has a one-third stake in the Pratt family's Visy Group packaging empire.

Neither Mr Geminder nor a spokesperson for Pact would comment yesterday when asked about the float plans.

Pact, which has a 40 per cent market share in Australia, supplies a wide range of plastic and steel packaging to the food, household cleaning, pharmaceutical, personal care and industrial markets.

It owns brands including VIP Packaging, Plaspak and Salient Asia Pacific.

It is the largest supplier to the dairy industry in New Zealand and major supplier to key Australian dairy producers such as takeover target Warrnambool Cheese and Butter, Lion and Murray Goulburn.

Its turnover is said to be around $1.2 billion, with $1 billion coming from its Australian and New Zealand operations. It has made more than 35 acquisitions since Mr Geminder led a management buyout of the industrial packaging assets acquired by Visy from Southcorp in 2002, which formed the centrepiece of Pact. Pact has its own internal mergers and acquisitions team, which is said to have looked at more than 1000 businesses over the past decade.

People who know the business well say Pact has met its budget forecasts in every year since Mr Geminder took over ownership.

While he is said to have been extremely hands-on in the business for many years after 2002 as an executive chairman, these days he is simply chairman and his role is believed to be more strategic.

Mr Geminder last year looked at selling a stake in the business to a private equity buyer, attracting the interest of KKR, Blackstone, Carlyle Group and Bain Capital.

However, those close to the billionaire say he wasn't prepared to sell because he did not think the private equity group could add enough to the business for the future.

But he is believed to have maintained good connections with the prospective buyers, some of whom subscribed to the TLB debt raising in June.

Earlier this year Mr Geminder quietly secured majority control of small Sydney packaging company Pro-Pac, the group he wants to turn into a $1 billion enterprise by 2017 through a growth-by-acquisition strategy.

His stake in Pro-Pac is now 51.1 per cent and the company has now expanded into the food sector. However, it is believed his investment in Pro-Pac will remain separate to Pact if the billionaire proceeds with a float of the latter business.