Anyone took a look at this Company?
I believe Turtle Creek is a major shareholder and there's a really good (one of the best I've read on SA) write up here:
https://seekingalpha.com/article/4215354-berry-global-undervalued-packaging-business-50-plus-percent-upside (check it out via Outline.com if you don't have a subscription)
Basically, Berry Plastics Group is one of the biggest producers of plastic for - among other things - diapers.
It's a rollup story but one where there's actually a lot of tangible synergies, since the main material is resin, and Berrys scale means it can source resin cheaper than the competition.
It was beaten down in October (unfortunately I wasn't aware of the Company then) due to the perceived risk of increased resin costs. But that risk is largely overblown, IMO, since they pass the cost along to their customers with a bit of a lag (if resin prices increase dramatically it's a real risk, since plastic might be substituted).
Anyway, they have a terrific track record of doing m&a (almost 40 deals I believe) where synergies have often brought the multiple down from some 8-9 to 4-5 x ebitda so one benefit from tangible synergies as well as a possible multiple re-rating due to private > public as well as scale.
It's a really boring industry (which I like), it seems to manage well in a downturn (any of you guys quitting your diapers, when we hit a recession?), and they operate in a fragmented industry with very tangible benefits from scale. There's some leverage, but they're gusing out cash, and todays market cap of 6,3b compares to guidance of 670m FCF in 2019 (they always seem to beat their FCF guidance) or a 10,5 pct. FCFE yield.
They've spent a couple of years doing smaller deals and bringing leverage down after they did a big one ine 14-15, so I think this is a story where earnings are gonna jump once every few years if/when they find a large deal.
Private equity loves the space (Carlyle-backed Novolex bought Waddington Group from Newell Brands recently) and Advent International bought Faerch Plast (for some 13-14 x Ebitda I'm told).
I haven't pulled the trigger, but with a +30 pct. ROIC, fragmented and boring market I think it's starting to look cheap since they should have high returns on incremental capital employed.
Really not sure what I'm missing, anyone else had a look?