Ancora Releases Amcor plc Investment Thesis Presented at the Annual Bloomberg Activism Forum

Rhea-AI Summary

Ancora Holdings Group has released its investment thesis on Amcor plc following the announced merger with Berry Global Group. The presentation, delivered at the Bloomberg Activism Forum, highlights the potential of the combined entity as a premium packaging company. Key financial projections include:

- Conservative synergy estimates of $650 million
- Projected proforma EBITDA of $4.5 billion
- Potential share price increase from ~$10 to ~$16
- Expected upside of 50-70%

The merger is anticipated to close in mid-2025, creating what Ancora believes will be a company with a durable free cash flow profile at a significantly discounted valuation.

Positive

• Projected $650 million in synergies from merger
• Estimated proforma EBITDA of $4.5 billion
• Potential 50-70% share price upside
• Expected share price increase from $10 to $16

Negative

• None.

Insights

Financial Analyst

The merger between Amcor and Berry Global represents a significant transformation in the packaging industry. The projected $650 million in synergies appears conservative, suggesting potential upside in cost savings and operational efficiencies. The combined entity's estimated EBITDA of $4.5 billion and Ancora's target price of $16 per share (representing a 60% premium from current levels) are supported by the merger's strategic rationale. The deal's all-stock structure preserves capital while creating a global packaging powerhouse. The projected 50-70% upside potential is particularly noteworthy given the defensive nature of packaging businesses and their typically stable cash flow profiles. However, investors should note that realizing synergies and achieving the projected valuation re-rating will require successful integration execution over multiple years.

Market Research Analyst

This merger creates a compelling market opportunity in the global packaging sector. The combined entity will benefit from increased scale, improved bargaining power with suppliers and enhanced operational efficiency. The conservative synergy estimate suggests management is taking a prudent approach while leaving room for potential outperformance. The current valuation discount presents an attractive entry point, particularly considering the defensive characteristics of packaging businesses and their essential role in consumer and healthcare supply chains. The projected EBITDA of $4.5 billion reflects the substantial scale advantages and potential margin expansion opportunities. The market appears to be undervaluing the combination's potential, creating an asymmetric risk-reward profile for investors with a medium to long-term horizon.

Combination of Amcor and Berry Global Creates a Compelling Investment Opportunity, With 50%-70% in Potential Upside as Synergies are Realized and Valuation Re-Rates

CLEVELAND--(BUSINESS WIRE)-- Ancora Holdings Group LLC (collectively with its affiliates, “Ancora”) today released its positive investment thesis on Amcor plc (NYSE: AMCR; ASX: AMC) (“Amcor”) that was presented at the Bloomberg Activism Forum by James Chadwick, President of Ancora Alternatives LLC. This follows Amcor’s recently announced merger with Berry Global Group, Inc. (NYSE: BERY) (“Berry”), which the companies expect to close in the middle of next year.¹ The presentation can be accessed here.

Key points from the presentation:²

• The combined entity stands to be a premium packaging company with a durable free cash flow profile and a conservatively estimated $650 million in synergies, at what we believe is a significantly discounted valuation.

• The combination creates a compelling investment opportunity with 50% to 70% upside, underpinned by Ancora’s strong conviction that the announced synergies are conservative.

• On a proforma basis, Ancora estimates the combined entity’s EBITDA could be $4.5 billion and its shares could rise from ~$10 today to ~$16 in the coming years.

About Ancora

Founded in 2003, Ancora Holdings Group, LLC offers integrated investment advisory, wealth management, retirement plan services and insurance solutions to individuals and institutions across the United States. The firm is a long-term supporter of union labor and has a history of working with union groups and public pension plans to deliver long-term value. Ancora’s comprehensive service offering is complemented by a dedicated team that has the breadth of expertise and operational structure of a global institution, with the responsiveness and flexibility of a boutique firm. For more information about Ancora, please visit https://ancora.net.

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¹ Amcor press release entitled “Amcor and Berry to combine in all-stock transaction creating a global leader in consumer, healthcare packaging solutions,” dated November 19, 2024 (link).
² See presentation for additional information regarding Ancora’s estimates and important performance disclosures (link).

View source version on businesswire.com: https://www.businesswire.com/news/home/20241210217729/en/

Longacre Square Partners

Charlotte Kiaie, 646-386-0091

ancora@longacresquare.com

Source: Ancora Holdings Group, LLC

FAQ

What is the expected synergy value from the Amcor (AMCR) and Berry Global merger?

According to Ancora's presentation, the merger is expected to generate conservatively estimated synergies of $650 million.

What is the projected share price target for Amcor (AMCR) after the Berry merger?

Ancora projects that Amcor's share price could increase from approximately $10 to approximately $16 in the coming years following the merger.

When is the Amcor (AMCR) and Berry Global merger expected to close?

The merger between Amcor and Berry Global is expected to close in the middle of 2025.

What is the estimated EBITDA for the combined Amcor (AMCR) and Berry entity?

Ancora estimates that the combined entity's proforma EBITDA could reach $4.5 billion.