IPO Report: Multi-Packaging Solutions International (MPSX)

Francis Gaskins |

Multi Packaging Solutions International (MPSX) is a leading, global provider of value-added specialty packaging solutions, based on sales, focused on high complexity products for the consumer, healthcare and multi-media markets. The company is based in New York, NY.

Two other companies are scheduled for the week of Oct. 19. The full IPO calendar is available at IPO Premium.

SEC Documents

Manager, Joint-managers: BofA Merrill Lynch, Barclays, Citigroup
Co-managers: Credit Suisse, Goldman Sachs, UBS Investment Bank, Baird, BMO Capital Markets

End of lockup (180 days): Tuesday, April 19, 2016
End of 10-day quiet period: Sunday, November 1, 2015

MPSX scheduled a $300 million IPO with a market capitalization of $1.2 billion at a price range midpoint of $16 for Thursday, Oct. 22, 2015 on NYSE.

MPSX IPO Summary

MPSX is a leading, global provider of value-added specialty packaging solutions, based on sales, focused on high complexity products for the consumer, healthcare and multi-media markets.

For the fiscal year ended June 30, 2015, approximately 47%, 47% and 6% of MPSX’s acquisition adjusted pro forma net sales came from its North American, European and Asian operations, respectively, and approximately 87% of its acquisition adjusted pro forma global net sales were derived from its consumer and healthcare end markets.

MPSX Valuation

Glossary

Accumulated deficit (mm)

.

.

-$56

     

Per share dilution

.

.

-$21.72

     
             

Valuation Ratios

Mrkt Cap (mm)

Price /Sls

Price /Erngs

Price /BkVlue

Price /TanBV

% offered in IPO

Multi Packaging Solutions International (MPSX) NYSE

$1,190

0.7

99.2

2.5

-3.4

25%

             

MPSX IPO Conclusion

Neutral

.7 times sales

P/E of 99, too high

Price to book 2.5, price to tangible bk -3.4

Recently grew by acquisition, comparative #'s not available

Per share dilution of -21.72 vs IPO mid-range of $16

MPSX Business

MPSX is a leading, global provider of value-added specialty packaging solutions, based on sales, focused on high complexity products for the consumer, healthcare and multi-media markets.

For the fiscal year ended June 30, 2015, approximately 47%, 47% and 6% of MPSX’s acquisition adjusted pro forma net sales came from its North American, European and Asian operations, respectively, and approximately 87% of its acquisition adjusted pro forma global net sales were derived from its consumer and healthcare end markets.

MPSX believes that its core addressable consumer and healthcare end markets encompass attractive, resilient and growing packaging categories, and MPSX believes it is a leader in these end markets across North America and Europe based on sales.

Additionally, MPSX believes it has a market-leading position in the multi-media specialty packaging sector based on sales, which accounts for 13% of its acquisition adjusted pro forma global net sales.

MPSX provides its customers with an extensive array of print-based specialty packaging solutions, including premium folding cartons, inserts, labels and rigid packaging across a variety of substrates and finishes, which are complemented by value-added services, including creative design, new product development and customized supply chain solutions.

Recent acquisitions
too many to get a handle on internal growth

Addressable markets
Based on management estimates, MPSX believes the market opportunity across its primary addressable markets is currently in excess of $17 billion of annual sales.

MPSX has long-term customer relationships driven by its global presence, breadth of products, value-added service offering, reputation for operational excellence, innovative packaging solutions and highly experienced management team. MPSX serves a blue chip customer base, including some of the world’s largest companies and the leaders in its target end markets.

MPSX’s global platform allows it to serve its customers, which include AstraZeneca, Coty, Diageo, Estée Lauder, GlaxoSmithKline, L’Oréal, Mondelēz International, Nestlé, Pernod Ricard, Pfizer and Sony, on both a local and global basis.

Customers
MPSX’s relationships with its top 20 customers average 34 years with many of its customers operating under multi-year contracts.

No one customer accounts for more than 5% of MPSX’s acquisition adjusted pro forma net sales for the twelve-month period ended June 30, 2015. Servicing MPSX’s customers requires it to meet stringent quality specifications, significant customer service standards and meaningful investment requirements.

MPSX’s healthcare customers, for example, require exacting standards of manufacturing in order to meet their regulatory requirements, which include strict process controls, site certification, chain of custody product information and strict adherence to print requirements and print quality due to the nature of the use of the product by MPSX’s customers’ end users.

For its consumer customers, MPSX is at the front end of its branding and marketing strategy, enhancing the visual impact at the shelf while also ensuring product integrity and regulatory compliance. MPSX believes its advanced printing and finish effects and designs often help MPSX’s customers position their products at the premium end of their addressable markets.

In addition MPSX provides value-added supply chain services such as VMI, specific carton-by-carton scan ability and data which enable the customer to track a product from manufacturer to end user.

Intellectual property

Although MPSX’s business is not dependent to any significant extent upon any single or related group of intellectual property, MPSX has registered intellectual property in the United States and in a number of foreign jurisdictions. In addition, MPSX has a book of copyrights. Further, MPSX does not believe its licenses to third-party intellectual property are significant to its business other than licenses to commercially available third-party software.

Competition

Select Competitors:                 

•  Arkay Packaging

•  Autajon

•  CCL Industries

•  Edelmann Group

•  Multi-Color Corporation

•  CCL Industries

•  Essentra

•  Jones Packaging

•  Nosco

•  ASG Europe

•  Bert-Co Industries

•  Wynalda Packaging

5% shareholders pre-IPO

Investments funds affiliated with The Carlyle Group         46.85%

Madison Dearborn         50%     

Dividends

No dividends are planned.

Use of proceeds

MPSX expects to receive $180 million from its IPO and use it for the following:

to repay a portion of its Term Loans and to pay related premiums, accrued and unpaid interest.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
MPSX Multi Packaging Solutions International Limited 14.09 -0.06 -0.45 51,770

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