Reynolds Consumer Products on Tuesday set the terms for its initial public offering, which could raise as much as $1.3 billion.
The Lake Forest, Ill., company , which makes Reynolds Wrap, Hefty trash bags and other products, said in a Securities and Exchange Commission filing that it planned to offer 47.2 million shares at an estimated $25 to $28 apiece.
"[Our] objective is to generate 20% of our revenue each year from new products introduced within the prior three years," Reynolds said in the filing.
The company plans to list its shares on Nasdaq under the symbol REYN. Credit Suisse Group, Goldman Sachs Group and JPMorgan Chase are leading the offering.
When the deal closes, about three-quarters of the voting power in Reynolds Consumer will be controlled by the PFL subsidiary of Packaging Holdings Ltd. of New Zealand, which in turn is owned by the investor and executive Graeme Hart.
For the first nine months of 2019, Reynolds said it had net income of $135 million on revenue of $2.2 billion.
For all of 2019, Reynolds Consumer expects to report net income of $220 million to $224 million, compared with $176 million for all of 2018.
The expected increase reflects favorable materials prices, mainly resin and aluminum, and lower interest expense, Reynolds said.
It estimates revenue in 2019 ranged $3.02 billion to $3.04 billion, compared with $3.14 billion a year earlier.
"Our mix of branded and store-brand products is a key competitive advantage that aligns our goal of growing the overall product category with our customers’ goals and positions us as a trusted strategic partner to our retailers," the company said in its prospectus.
"Our Reynolds and Hefty brands have preeminent positions in their categories and carry strong brand recognition in household aisles."
Reynolds Consumer operates 17 manufacturing facilities in the U.S. and Canada and employs more than 5,000 people.
For fiscal 2020 Reynolds Consumer expects to pay a quarterly dividend of 22.3 cents a share. For the quarter ending March 31, it expects to pay out a prorated dividend of about 15 cents a share. Dividends are subject to declaration by the board, the filing said.
Changes in raw-material and energy costs can hurt the business. Developing and protecting its brands, the company said, require “significant investment in product innovation, brand building, advertising and marketing.”
And “sustainability concerns, including the recycling of products, have received increased focus in recent years and may play an increasing role in brand management and consumer purchasing decisions.”
Reynolds Consumer Products filed for a public offering in November. In a statement in September, it said it had confidentially submitted its IPO registration to the SEC.
The year has started off quietly for new listings in the U.S., with just $429 million raised through IPOs, according to Bloomberg.