New Toyo

Buying over New Toyo is not just a ticket to tobacco printing business from BAT in Asia Pacific.
If BAT takes over Imperial Tobacco Group or further increase its stake in Reynolds American (i.e. building upon the current 42% to say 51%), printing volumes for New Toyo/Tien Wah would increase tremendously.

*************
http://www.cnbc.com/id/101352537
"British American Tobacco will soon be free to build on its 42 percent stake in Reynolds American Inc. But bankers say British American could also take interest in U.K. rival Imperial Tobacco Group if it can overcome antitrust hurdles in Europe. CNBC's John Jannarone explains."

(30-03-2014, 03:18 PM)pianist Wrote: i suggest moderator monitor & ban further speculative posts here as there are (same tots as mas370 thread) smells of speculation going on.

anyway, congrats in advance to those vested..huat ah......cant wait to hug hug yen yen at the agm soon..

Over-moderation will dilute the intellectual exchange. I don't see the need for moderation here.

Regards
Moderator

Ended at 32 cents today with 388 lots done. high volume considering the fact in a lot of days, volume was close to ZERO...

Does anyone know why Amcor use EBITDA when pricing for acquisition?
any special reasoning here?

tks.

Example of EBITDA valuation below.
it was 6.6 Times for the case of Detmold Flexibles. A name never heard before, unlike Tien Wah/New Toyo...

New Toyo's EBITDA ~ $40mil. Valuation based on 6.6 times = $264 mil or 60 cents OR 90% Upside from current price level.

***************

Amcor announces Detmold Flexibles acquisition

Amcor announces today that it has signed an agreement to acquire Detmold Flexibles, a privately-owned Australian flexibles packaging business for $50 million. The business will be part of Amcor Flexibles Asia Pacific.

18 November, 2013:

Detmold Flexibles operates two plants in Melbourne and has sales of approximately $55 million. The acquisition price represents an EBITDA multiple of 6.6 times and after the realisation of synergy benefits return on funds employed are expected to be more than 20%.

Amcor CEO and Managing Director, Ken MacKenzie said: “From a strategic perspective Detmold Flexibles builds on the success of the 2012 Aperio Group acquisition. It enables the Australian flexibles business to strengthen their manufacturing centres of excellence with plants focussed on specific technologies and end market segments.

“The acquisition will further improve our customer value proposition in the Australian market by enhancing the ability to invest in both product and process innovation. Given the manufacturing overlap in the businesses there is considerable opportunity for operational synergies and returns are expected to be more than 20%.”

The acquisition is subject to ACCC approval.

(31-03-2014, 05:12 PM)Curiousparty Wrote: Ended at 32 cents today with 388 lots done. high volume considering the fact in a lot of days, volume was close to ZERO...

Does anyone know why Amcor use EBITDA when pricing for acquisition?
any special reasoning here?

tks.

I still dont understand why the Yen father and son do not want to be on the board. Very very strange. Has it got anything to do with takeover code, perhaps in terms of percent holdings? Perhaps someone can ask at AGM (I am away last 2 weeks April).
Thanks.

Does Tien Wah also own a part of New Toyo ?

quite a complicated relationship though...

if Amcor launches a GO for Tien Wah, what does it mean for New Toyo?
Likewise, if Amcor launches a GO for New Toyo, what does it mean for Tien Wah?

Is there any requirement that a simultaneous GO be launched on both New Toyo and Tien Wah?

how does it work? Can anyone well-versed in M&A activities help us out? many tks.

(01-04-2014, 12:10 AM)mee2 Wrote:

(31-03-2014, 05:12 PM)Curiousparty Wrote: Ended at 32 cents today with 388 lots done. high volume considering the fact in a lot of days, volume was close to ZERO...

Does anyone know why Amcor use EBITDA when pricing for acquisition?
any special reasoning here?

tks.

I still dont understand why the Yen father and son do not want to be on the board. Very very strange. Has it got anything to do with takeover code, perhaps in terms of percent holdings? Perhaps someone can ask at AGM (I am away last 2 weeks April).
Thanks.

(01-04-2014, 12:37 AM)Curiousparty Wrote: Does Tien Wah also own a part of New Toyo ?

quite a complicated relationship though...

if Amcor launches a GO for Tien Wah, what does it mean for New Toyo?
Likewise, if Amcor launches a GO for New Toyo, what does it mean for Tien Wah?

Is there any requirement that a simultaneous GO be launched on both New Toyo and Tien Wah?

how does it work? Can anyone well-versed in M&A activities help us out? many tks.

(01-04-2014, 12:10 AM)mee2 Wrote:

(31-03-2014, 05:12 PM)Curiousparty Wrote: Ended at 32 cents today with 388 lots done. high volume considering the fact in a lot of days, volume was close to ZERO...

Does anyone know why Amcor use EBITDA when pricing for acquisition?
any special reasoning here?

tks.

I still dont understand why the Yen father and son do not want to be on the board. Very very strange. Has it got anything to do with takeover code, perhaps in terms of percent holdings? Perhaps someone can ask at AGM (I am away last 2 weeks April).
Thanks.

New Toyo owns more than 50% of TW. If anyone took control of NT, it/he will automatically controls TW.

The fever is dying down? New Toyo still cannot reach its NAV at 35-36 cents...

The road ahead is going to be tough for tobacco packaging in general.
And we might see more M&A activities and consolidation (e.g. #1 buying up #2/#3, etc)

Tien wah was being referenced to in Page 9/10 of the report.

How much would Amcor pay for the 5th largest tobacco packaging player globally?

*****************

Case study: Plain Packaging Australia impacts tobacco packaging supplier result 2013
The European directive begs an understanding of the effect of Australia's plain packaging rules that which came into full force from December 2012. Tien Wah's (the #5 tobacco packaging player globally and the owner of ANZPAC) tobacco packaging business in Australia reported minimal group profit erosion after the advent of plain tobacco packaging in Australia. Despite the advent of plain packaging, British American Tobacco, Tien Wah's Australia customer, reported profit growth in Australia. Volume erosion did not accelerate and BAT achieved higher prices. There was growth in the premium segment. Unfortunately, for Tien Wah, even though its earnings were not overly impacted by plain packaging, it could not share in BAT's value growth with higher value packaging. Tien Wah, like others expressed a challenging outlook for 2014. Amcor's observation about the Australia tobacco packaging market is that the colour and packaging complexity evolved to a point no worse than the existing colour usage and complexity that was in the market prior to standardised packaging.

It is worth pointing out that future value growth of tobacco packaging in Australia would be limited under the current standardised packaging regulation. Separately, PMI reported that the Australia premium segment declined in 1Q 2013 upon the advent of the new packaging rule.

**********
Mayr Melnhoff, the #2 cigarette carton converter, recently cancelled its proposed €100mn acquisition of AR Carton, the #4 player which says much about the near-term outlook for the Eastern European industry. AR Carton has three factories: Germany (1) and Russia (2) with about €85mn in sales. Perhaps the political instability, depreciation of the ruble and a 7.5% drop in Russian industry cigarette volumes undermined the transaction. But also, major tobacco industry players see 2014 as a weak and volatile year in-part because of higher excise taxes in Russia.

******

New Toyo's sales = $280mil.
Applying the same ratio, 100/85 x 280 = $330 mil or 75 cents or 140% upside potential.

Well, the #2 player can NOW consider buying over Tien Wah/New Toyo (#5 player) since the earlier deal to buy over #4 player had fallen through!

**********

Mayr Melnhoff, the #2 cigarette carton converter, recently cancelled its proposed €100mn acquisition of AR Carton, the #4 player which says much about the near-term outlook for the Eastern European industry. AR Carton has three factories: Germany (1) and Russia (2) with about €85mn in sales. Perhaps the political instability, depreciation of the ruble and a 7.5% drop in Russian industry cigarette volumes undermined the transaction. But also, major tobacco industry players see 2014 as a weak and volatile year in-part because of higher excise taxes in Russia.