Berry Global Spin-off Notes

February 15, 2024 Update

On February 7, 2024, Berry Global (BERY) announced that it is going to spin off its Health, Hygiene, and Specialties business and merge it will Glatfelter Corporation (GLT). The spin-off is expected to be tax free and close in the second half of 2024.

BERY had been reviewing strategic alternatives for its Health, Hygiene, and Specialties business and apparently, this deal was the best option. It appears to be a great deal for GLT as it looked to be headed for bankruptcy. GLT reacted well appreciating by ~100% and some on twitter are suggesting that it should trade higher. But I don’t see the logic yet. The combined company is trading at ~6x EBITDA on a pro forma basis. Doesn’t seem like a steal for a business with declining revenue and margins.

Berry RemainCo doesn’t look too interesting either give revenue headwinds. But I will continue to dig in to see if I’m missing anything.