UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) March 21, 2017
Multi Packaging Solutions International Limited
(Exact name of registrant as specified in its charter)
| Bermuda | 001-37598 | 98-1249740 | ||
(State or Other Jurisdiction of Incorporation or Organization) | (Commission File Number) | (I.R.S. Employer Identification Number) |
Clarendon House, 2 Church Street, Hamilton HM11, Bermuda
(Address of Principal Executive Offices)
(441)295-5950
(Registrant’s Telephone Number, Including Area Code)
Check the appropriate box below if the Form8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule14a-12 under the Exchange Act (17 CFR240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule14d-2(b) under the Exchange Act (17 CFR240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule13e-4(c) under the Exchange Act (17 CFR240.13e-4(c)) |
| Item 8.01 | Other Events. |
On January 23, 2017, Multi Packaging Solutions International Limited, a Bermuda exempted company (“MPS”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with WestRock Company, a Delaware corporation (“WestRock”), and WRK Merger Sub Limited, a Bermuda exempted company (“Merger Sub”), which Merger Agreement stated the terms and conditions on which WestRock would acquire MPS (the “Proposed Transaction”).
As previously disclosed, between February 28, 2017 and March 8, 2017, three purported class action complaints concerning the Proposed Transaction were filed in the United States District Court for the Southern District of New York against all or some of the following: MPS, certain of MPS’s current executive officers and directors, WestRock, and Merger Sub (together, the “Merger Litigation”). The plaintiffs in the Merger Litigation claimed that the definitive proxy statement on Schedule 14A filed by MPS with the United States Securities and Exchange Commission on March 3, 2017, and mailed to the MPS shareholders on or about March 7, 2017 (the “Proxy Statement”), omitted material information regarding the Proposed Transaction.
The parties to the Merger Litigation subsequently engaged inarm’s-length negotiations to attempt to resolve the claims asserted in the Merger Litigation, and reached an agreement whereby MPS would file on this Current Report onForm 8-K (this “Form8-K”) certain supplemental disclosures regarding the Proposed Transaction.
The parties to the Merger Agreement believe that no further disclosure is required to supplement the Proxy Statement. However, to avoid the risk that the Merger Litigation may delay or otherwise adversely affect the consummation of the Proposed Transaction, MPS hereby makes the supplemental disclosures to the Proxy Statement set forth below.
The supplemental disclosures in this Form8-K should be read in conjunction with the disclosures contained in the Proxy Statement, which in turn should be read in its entirety. To the extent that information in this Form8-K differs from or updates information contained in the Proxy Statement, the information in this Form8-K shall supersede or supplement the information in the Proxy Statement. Nothing in this Form8-K shall be deemed an admission of the legal necessity or materiality of any of the disclosures set forth herein.
Capitalized terms used herein, but not otherwise defined, shall have the meanings ascribed to such terms in the Proxy Statement.
The following disclosures supplement and amend the existing disclosures contained under the caption “The Merger – Opinion of BofA Merrill Lynch – MPS Financial Analyses” beginning on page 39 of the Proxy Statement:
The following disclosure supplements and amends the disclosure on page 39 of the Proxy Statement under the caption “ – Selected Publicly Traded Companies Analysis” by replacing the last sentence on such page in its entirety with the following sentence, and adding the following table below the summary table on that page:
The following tables set forth the underlying observed data for each of the statistics considered:
Selected Publicly Traded Company | CY2016E – 2018E EBITDA CAGR | CY2017E EBITDA Margin | ||||||
Amcor Limited (1) | 6.2 | % | 15.3 | % | ||||
AptarGroup, Inc. | 4.8 | % | 20.5 | % | ||||
Bemis Company, Inc. | 5.7 | % | 15.3 | % | ||||
Berry Plastics Group, Inc. (2) | 3.7 | % | 18.8 | % | ||||
CCL Industries Inc. (3) | 3.3 | % | 20.8 | % | ||||
Graphic Packaging Holding Company | 4.1 | % | 18.3 | % | ||||
Multi-Color Corporation | 6.5 | % | 17.9 | % | ||||
Sealed Air Corporation | 5.6 | % | 17.7 | % | ||||
WestRock Company | 3.4 | % | 16.6 | % | ||||
| (1) | Amcor Limited adjusted for the acquisition of Sonoco’s Specialty Containers business. |
| (2) | Berry Plastics Group, Inc. adjusted for the acquisition of AEP Industries. |
| (3) | CCL Industries Inc. adjusted for the acquisition of the Innovia Group of companies. |
The following disclosure supplements and amends the disclosure on page 40 of the Proxy Statement under the caption “–Selected Publicly Traded Companies Analysis” by inserting the following sentence and adding the following table before the second sentence on such page:
The table below sets forth EV / calendar year 2017 estimated EBITDA multiple for each of the selected publicly traded companies:
Selected Publicly Traded Company | EV / CY2017E EBITDA | |||
Amcor Limited (1) | 11. | 2x | ||
AptarGroup, Inc. | 10. | 4x | ||
Bemis Company, Inc. | 9. | 8x | ||
Berry Plastics Group, Inc. (2) | 9. | 5x | ||
CCL Industries Inc. (3) | 10. | 8x | ||
Graphic Packaging Holding Company | 7. | 8x | ||
Multi-Color Corporation | 10. | 7x | ||
Sealed Air Corporation | 11. | 1x | ||
WestRock Company | 7. | 9x | ||
| (1) | Amcor Limited adjusted for the acquisition of Sonoco’s Specialty Containers business. |
| (2) | Berry Plastics Group, Inc. adjusted for the acquisition of AEP Industries. |
| (3) | CCL Industries Inc. adjusted for the acquisition of the Innovia Group of companies. |
The following disclosure supplements and amends the disclosure on page 40 of the Proxy Statement under the caption “–Selected Precedent Transactions Analysis” by replacing the chart on such page in its entirety with the following sentence, and adding the following table below:
The table below sets forth the EV / LTM EBITDA multiple observed for each of the selected transactions:
Announcement Date | Acquiror | Target | EV / LTM EBITDA | |||||
4/25/16 | Ardagh Group SA | Ball Corporation / Rexam Plc Divested Assets | 8.6 | x | ||||
6/8/15 | Apollo Global Management LLC | Verallia SA (Saint- Gobain) | 7.3 | x | ||||
5/13/15 | Owens-Illinois Inc. | Vitro SAB de CV – Food & Beverage Glass Containers | 7.7 | x | ||||
2/19/15 | Ball Corporation | Rexam Plc | 9.5 | x | ||||
1/26/15 | Rock-Tenn Co. | MeadWestvaco Corporation | 10.3 | x | ||||
12/14/14 | Graphic Packaging Holding Corporation | Cascades Inc.’s folding carton assets | 7.8 | x | ||||
11/12/14 | Essentra Plc | Clondalkin Group – Specialist Packaging Segment | 8.2 | x (1) | ||||
9/1/14 | Crown Holdings, Inc. | EMPAQUE | 8.2 | x (2) | ||||
2/14/14 | Graphic Packaging Holding Corporation | Benson Group | 6.6 | x | ||||
10/31/13 | Crown Holdings, Inc. | Mivisa Envases, S.A.U. | 9.0 | x | ||||
7/8/13 | Madison Dearborn Partners, LLC | Multi Packaging Solutions Inc. | 7.6 | x | ||||
3/19/13 | Essentra Plc | Contego Healthcare Limited (Platinum Equity) | 8.9 | x | ||||
11/12/12 | Graphic Packaging Holding Corporation | Contego Packaging Holdings, Ltd.’s European Food Carton Business | 6.8 | x | ||||
10/2/12 | Platinum Equity, LLC | BWAY Parent Company, Inc. | 7.9 | x | ||||
| (1) | Based on 2013 EBITDA, as publicly disclosed. |
| (2) | Based on estimated 2014 EBITDA, as publicly disclosed. |
The following disclosure supplements and amends the disclosure contained on page 41 of the Proxy Statement under the caption
“–Discounted Cash Flow Analysis” by adding the below sentence prior to the last sentence in each of the two paragraphs of that section:
“The range of the estimated present values of the U.S. federal NOLs MPS was forecasted to realize during MPS’s fiscal year 2017 through fiscal year 2032, in each case based on the MPS Forecast, and using discount rates ranging from 8.2% to 9.8%, which were based on an estimate of MPS’s weighted average cost of capital, was $10.2 million to $10.3 million.”
The following disclosure supplements and amends the existing disclosures contained under the caption “The Merger – Certain Financial Forecasts” beginning on page 44 of the Proxy Statement:
The following table supplements and amends the disclosure on page 45 of the Proxy Statement by replacing the table on such page in its entirety with the following:
Fiscal Year Ending June 30, | ||||||||||||
(Dollars in millions, except per share data) | 2017E | 2018E | 2019E | |||||||||
Net Sales | $ | 1,561 | $ | 1,617 | $ | 1,631 | ||||||
Net Income (1) | $ | 54 | $ | 88 | $ | 103 | ||||||
EBITDA (1) (2) | $ | 238 | $ | 270 | $ | 274 | ||||||
Depreciation | $ | 67 | $ | 65 | $ | 64 | ||||||
Amortization | $ | 51 | $ | 48 | $ | 41 | ||||||
EBIT (1) (2) | $ | 120 | $ | 157 | $ | 169 | ||||||
Net Interest Expense | $ | 50 | $ | 38 | $ | 31 | ||||||
Income Tax Expense | $ | 15 | (4) | $ | 41 | $ | 44 | |||||
Decrease in Net Working Capital | $ | 11 | (4) | $ | — | — | ||||||
Capital expenditures | $ | 60 | $ | 58 | $ | 58 | ||||||
Unlevered Free Cash Flow (1) (3) | $ | 82 | (5) | $ | 171 | $ | 172 | |||||
Cash Flow from Operations (1) | $ | 165 | $ | 214 | $ | 223 | ||||||
| (1) | The Management Forecast contemplated ade minimis amount of stock-based compensation for the relevant projection period. |
| (2) | EBITDA is defined as net income excluding net interest expense, income tax expense, depreciation and amortization. EBIT is defined as net income excluding net interest expense and income tax expense. EBIT and EBITDA arenon-GAAP financial measures and should not be considered as an alternative to operating income or net income as a measure of operating performance or cash flow or as a measure of liquidity. |
| (3) | Terminal year unlevered free cash flow of $163 million used by BofA Merrill Lynch to perform a discounted cash flow analysis is based on fiscal year 2019 and assumes terminal year depreciation equal to 90.7% of capital expenditures, terminal year capital expenditures of $58 million, amortization of $23 million and decrease in net working capital of $2 million, in each case as provided by MPS management. |
| (4) | Represents asix-month projection period covering estimated 2017 third and fourth quarter values. |
| (5) | Represents asix-month projection period covering estimated 2017 third and fourth quarter values. MPS management forecast net sales of $768 million, EBITDA of $120 million, depreciation of $33 million, amortization of $25 million, EBIT of $62 million, income tax expense of $15 million, decrease in net working capital of $11 million and capital expenditures of $33 million for suchsix-month projection period. |
The following disclosure supplements and amends the disclosure on page 45 on the Proxy Statement by adding the following immediately above the caption “– Interests of Certain Directors and Executive Officers of MPS” on such page:
The following table reflects the value of certain NOLs MPS was forecasted to realize during MPS’s fiscal year 2017 through fiscal year 2032 based on the MPS Forecast:
Fiscal Year Ending June 30, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | 2017E | 2018E | 2019E | 2020E | 2021E | 2022E | 2023E | 2024E | 2025E | 2026E | 2027E | 2028E | 2029E | 2030E | 2031E | 2032E | ||||||||||||||||||||||||||||||||||||||||||||||||
NOL Utilization | $ | 47.5 | $ | 4.9 | $ | 0.2 | $ | 0.2 | $ | 0.2 | $ | 0.2 | $ | 0.2 | $ | 0.2 | $ | 0.2 | $ | 0.2 | $ | 0.2 | $ | 0.2 | $ | 0.2 | $ | 0.2 | $ | 0.2 | $ | 0.2 | ||||||||||||||||||||||||||||||||
Additional Information and Where to Find It
In connection with the Proposed Transaction involving MPS, WestRock and Merger Sub, MPS filed the Proxy Statement with the SEC on March 3, 2017. The Proxy Statement and a proxy card were first mailed on or about March 7, 2017 to each shareholder entitled to vote at the special meeting relating to the Proposed Transaction. INVESTORS AND SECURITY HOLDERS OF MPS ARE URGED TO READ THESE MATERIALS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS IN CONNECTION WITH THE PROPOSED MERGER THAT MPS FILES WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT MPS AND THE PROPOSED MERGER. The Proxy Statement and any other relevant materials containing important information about MPS or the proposed merger (when they become available), as such documents are filed by MPS with the SEC, may be obtained free of charge at the SEC’s website at www.sec.gov. In addition, investors and security holders may obtain free copies of the documents filed with the SEC by sending a request to MPS’s Secretary at Multi Packaging Solutions International Limited, 885 Third Avenue, 28th floor, New York, New York 10022.
Participants in Solicitation
MPS and its directors and executive officers, and WestRock and its directors and executive officers, may be deemed to be participants in the solicitation of proxies from MPS’s shareholders with respect to the Proposed Transaction. Information about MPS’s directors and executive officers and their ownership of MPS’s common stock is set forth in MPS’s Annual Report onForm 10-K for the fiscal year ended June 30, 2016, which was filed with the SEC on August 23, 2016 and MPS’s proxy statement for its 2016 Annual General Meeting of Members, which was filed with the SEC on October 6, 2016. Information about the directors and executive officers of WestRock is set forth in the proxy statement for WestRock’s 2017 Annual Meeting of shareholders, which was filed with the SEC on December 16, 2016. Information regarding the identity of the potential participants, and their direct or indirect interests in the merger, by security holdings or otherwise, is set forth in the Proxy Statement.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| MULTI PACKAGING SOLUTIONS INTERNATIONAL LIMITED | ||||
| Date: March 21, 2017 | By: | /s/ Ross Weiner | ||
| Ross Weiner | ||||
| Vice President and Chief Accounting Officer | ||||