Ardagh set to buy Italian firm for €125m

IRISH-BACKED glass and packaging group Ardagh is set to buy a smaller rival in Italy in a deal valued at about €125 million.

Ardagh, which supplies bottles to the likes of Heineken and tins to John West, yesterday said it had agreed to buy Italian manufacturer Finanziaria di Partecipazioni Industriali (Fi Par).

The deal is subject to certain conditions. Ardagh did not reveal a purchase price, but it is understood that the deal is worth in the region of €125 million.

Fi Par makes tins and metal containers for the food and aerosol industries in Italy and Greece. It had revenues of about €150 million in 2010 and employed 440 people in its five manufacturing locations – four in Italy and one in Greece.

The Italian competition authority has approved the deal and it is likely to go ahead early next month.

The purchase of Fi Par would give Ardagh 10 plants in Italy.

Ardagh had signalled early last month, when it raised €200 million from capital markets, that it planned to make a number of bolt-on acquisitions on the scale of Fi Par.

Chief executive Niall Wall said yesterday the deal significantly reinforced the group’s position in key product areas, metal food containers and aerosols.

“Annual group sales in Italy, including glass and metal, will now be substantially increased, making this one of our key geographies and further strengthening our presence in southern Europe,” he said.

“This is a really good transaction.”

Irish businessman Paul Coulson and a number of Irish shareholders control Ardagh. The group is a world leader in the production of bottles and glass and metal containers for the for food, drink and consumer products.

In September, it took a major step forward in size when it bought Impress Co-operative for €1.7 billion from private equity player Doughty Hanson.

It operates 82 manufacturing plants in 24 countries, employs 14,000 and has global sales in excess of €3.2 billion.

About 60 per cent of these revenues come from the food industry, and two-thirds originate in Europe.

The group is descended from the old Ardagh plc, which was listed on the Irish Stock Exchange. The company stopped manufacturing in Ireland in 2002 as costs here were too high.

An associate, South Wharf plc, subsequently sold Ardagh’s Ringsend manufacturing site in 2007 for €412 million to a consortium that included the State, developer Bernard McNamara and private backers. The site is now worth about €50 million.

Anyone who invested in Ardagh in 1998 has seen the value of their holding multiply by 50.