Reynolds Wrap Maker Targets $7 Billion IPO Valuation

(Bloomberg) -- Reynolds Consumer Products Inc. the maker of Reynolds Wrap aluminum foil and Hefty trash bags, intends to seek a valuation of $7 billion in its U.S. initial public offering, according to people with knowledge of the matter.

The company hired Credit Suisse Group AG, JPMorgan Chase & Co. and Goldman Sachs Group Inc. for the share sale, said the people, who asked not to be identified because the information was private. The offering could happen as soon as this year or the first quarter of 2020, the people said.

Reynolds, based in Lake Forest, Illinois, also has explored a sale, one of the people said.

The company, backed by New Zealand billionaire Graeme Hart’s Rank Group Ltd., said in a statement in September that it had confidentially submitted its IPO registration to the U.S. Securities and Exchange Commission. Reynolds said in the statement that there was no assurance an IPO would be completed.

The company’s share-price target and other details of its IPO plan, including the expected valuation, won’t become public until later filings.

Representatives for Reynolds, Credit Suisse and JPMorgan declined to comment. Representatives for Goldman Sachs and Rank Group couldn’t be immediately reached for comment.

Sector Interest

The packaging sector, fragmented and largely recession proof, has attracted substantial private equity interest.

Rank Group is also in talks with private equity firm Cerberus Capital Management on a sale of its bottle tops business Closure Systems International which could be valued at up to $1 billion, Bloomberg News reported this month. The deal was announced last week.

Reynolds reported adjusted earnings before interest, taxes, depreciation and amortization of $182 million for the second quarter, a 17% growth from the same period last year, according to a company presentation. Revenue for that period fell to $796 million from $797 million from the previous year.

To contact the reporters on this story: Kiel Porter in Chicago at kporter17@bloomberg.net;Crystal Tse in New York at ctse44@bloomberg.net

To contact the editors responsible for this story: Liana Baker at lbaker75@bloomberg.net, Michael Hytha, Matthew Monks

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