Unwrapping The Multi Packaging Solutions IPO
Multi Packaging Solutions Inc. (NYSE: MPSX) expects to raise $300 million in its upcoming IPO. Based in New York, Multi Packaging Solutions provides print, label and packaging solutions for industries such as entertainment, healthcare, beverage, consumer, cosmetics and media end markets globally.
Multi Packaging Solutions will offer 18.75 million shares at an expected price range of $15 to $17. If the underwriters price the IPO at the midpoint of that range, MPSX will have a market capitalization of $1.2 billion.
MPSX filed for the IPO on June 26, 2015.
Lead Underwriters: Barclays Capital and BofA Merrill Lynch
Underwriters: BMO Capital Markets, Citigroup Global Markets, Credit Suisse Securities, Goldman Sachs, Robert W. Baird & Co., and UBS Investment Bank
Business Summary: Provider of Label, Print and Packaging Solutions
Multi Packaging Solutions provides print, packaging and label solutions for healthcare, entertainment, consumer, beverage, cosmetics and media end markets worldwide. The company offers a wide array of print-based specialty packaging solutions, such as labels, rigid packaging and folded carton inserts using a variety of materials and finishes with value-added services including creative design, customized solutions and product development.
The company's healthcare products include folding cartons, blister cards, windowed cartons, PVC packaging, inserts and outserts, point-of-purchase products, and clinical supplies, such as patient diaries, recruitment materials, specialty packaging, patient education kits, and flexible films.
Its product portfolio for the entertainment market includes booklets, folders and tray cards for CDs and DVDs, manual, cover sheets, folders, registration cards and inserts for games, and specialty packaging utilizing acrylic, metal fabric and other materials.
Its products for the consumer brands market include value-added packaging, labels, point-of-purchase, marketing and corporate identity essentials, and paper and film products. Digital graphic services include covering pre-press, art working, digital proofs, file-to-plate, localization, translation and digital management solutions.
(Source)
For the fiscal year ended June 30, 2014, approximately 47%, 47% and 6% of net sales came from the North American, European and Asian segments, respectively.
Multi Packaging Solutions intends to use the net proceeds of the IPO to pay down debt.
Executive Management Highlights
Founder and CEO Marc Shore launched Multi Packaging Solutions in 2005. He began his career in the print and packaging industry at Shorewood Packaging Corporation, which was sold to International Paper in 2000.
CFO Bill Hogan joined Multi Packaging Solutions in 2006. He has 30 years of experience in the print and packaging industry and the financial industry, including Deloitte & Touche, Shorewood Packaging and International Paper. Mr. Hogan is a certified public accountant.
The top competitors to Multi Packaging Solutions in the print and packaging industry include International Paper, WestRock Co. (NYSE:WRK), Amcor, Bemis (NYSE:BMS), Berry Plastics (NYSE:BERY), Crown Holdings (NYSE:CCK), Graphic Packaging (NYSE:GPK), Owens-Illinois, Tetra Pack, Rexam, Sealed Air (NYSE:SEE), Toyo Seikan and MeadWestvaco (MWV).
Financial Highlights: Steady Sales, Recent Move to Profitability
Multi Packaging Solutions provided the following figures from its financial documents for the nine months ended March 31:
2015 |
2014 |
|
Revenue |
$1,215,116,000 |
$470,738,000 |
Net Income |
$11,883,000 |
($40,593,000) |
As of June 30, 2015:
Assets |
$1,882,125,000 |
Total Liabilities |
$1,593,435,000 |
Stockholders' Equity |
$281,982,000 |
Conclusion: Consider Buying In
We look forward to this IPO - its notable growth and leading position in this unique industry (a departure from leading IPO sectors healthcare and finance) have us intrigued.
Some risks to note are: strong competition, a reliance on macroeconomic conditions in countries of operation, currency risk, and risk of not integrating its new acquisitions.
Despite these, and a somewhat weaker IPO market at present, we hear the deal is oversubscribed. We suggest investors consider buying into this solid company.
Disclosure: None.