Berry Plastics Raises $471 Million Pricing IPO Low End of Range

Berry Plastics Group Inc. (BERY), the packaging company owned by Apollo Global Management LLC (APO), raised $471 million in its initial public offering, pricing the shares at the low end of the marketed range.

Berry sold 29.4 million shares for $16 each, according to a statement from the company, after offering the shares for $16 to $18 apiece. The stock will start trading today on the New York Stock Exchange under the symbol BERY. The shares sold in the IPO represent a 26 percent stake.

Apollo, which bought Berry in 2006, sought to raise as much as $529.4 million in the offering, giving the company an enterprise value in line with its peers ahead of the IPO, according to data compiled by Bloomberg. Meanwhile, net debt is projected to be $4.1 billion, or 6 times Ebitda, more than twice the level of competitors, the data show. Berry’s higher debt load may have given investors pause, even with a valuation similar to rivals, said Todd Wenning of Morningstar Inc.

“Relative to the other players in the field, they stand out as having a higher debt load and little bit more risky balance sheet,” Wenning, a Chicago-based analyst, said in a telephone interview before the IPO. “As an investor, if they’re trading one-to-one valuation wise, certainly there would be a concern.”

Apollo has been seeking to sell its portfolio companies back to the public to return money to clients as it prepares to market a new flagship buyout fund. The New York-based firm expects to start marketing the pool later this year, seeking $10 billion to $12 billion, two people with knowledge of the plans have said.

Apollo, Graham

Ebitda at Berry was $680 million in the 12 months through June 30, filings show. The company also disclosed adjusted Ebidta of $784 million during the period, which excludes charges for restructuring. The IPO price values the company’s outstanding common stock at $1.8 billion.

Apollo and Graham Partners Inc., which bought Berry from Goldman Sachs Group Inc. and JPMorgan Chase & Co. (JPM) in 2006, planned to retain 59 percent and 5.4 percent, respectively, of the company’s common stock after the IPO, filings show.

Bank of America Corp., Citigroup Inc., Barclays Plc and Deutsche Bank AG led the sale.

To contact the reporter on this story: Lee Spears in New York at lspears3@bloomberg.net

To contact the editor responsible for this story: Jeffrey McCracken at jmccracken3@bloomberg.net

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