Pactiv Evergreen IPO Seeks to Raise Up to $862 Million

Pactiv Evergreen, a food and beverage packaging producer, said its IPO of 41 million shares would price at $18 to $21 a share.
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Pactiv Evergreen, a food and beverage packaging producer, said its initial public offering would include 41 million shares priced at $18 to $21 each.

That would bring the Lake Forest, Ill., company $738.5 million to $861.6 million. 

The underwriters have a 30-day option on 6.15 million more common shares. 

The lead underwriters are Credit Suisse, Citigroup, Bank of America Securities and Goldman Sachs

The company has applied to list its shares on Nasdaq with the ticker PTVE. 

Pactiv said it would use the proceeds from the IPO to repay debt and for general purposes.

The company, currently known as Reynolds Group, says in its prospectus that it's the largest manufacturer and distributor of fresh-food-service and food-merchandising products and fresh beverage cartons in North America, measured by revenue.

“We produce a broad range of on-trend and feature-rich products that protect, package and display fresh food and beverages for consumers who want to eat or drink fresh, prepared or ready-to-eat food and beverages conveniently and with confidence," Pactiv Evergreen said.

For the first half of 2020, Pactiv swung to net income of $2.58 a share from a loss of 70 cents a share in the year-earlier first half. Revenue fell 9.3% to $3.26 billion.

Among the risks for investors: “[The] prices of many of our raw materials have fluctuated significantly in recent years,” Pactiv said. 

While it does hedging, “these hedging agreements do not cover all of our needs, and hedging may reduce the positive impact we may otherwise receive when raw material prices decline.”

Also, “over the last several years, there has been a trend toward consolidation among suppliers of many of our principal raw materials, and we expect that this trend will continue,” Pactiv said. 

“Consolidation among our key suppliers could enhance their ability to increase prices, forcing us to pay more for such raw materials.”