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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): February 6, 2024
BERRY GLOBAL GROUP, INC.
(Exact name of registrant as specified in charter)
| Delaware |
1-35672 |
20-5234618 |
| (State of incorporation) |
(Commission File Number) |
(IRS Employer
Identification No.) |
101 Oakley Street
Evansville, Indiana 47710
(Address of principal executive offices / Zip Code)
(812) 424-2904
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| x |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b)
of the Act:
| Title of each class |
Trading Symbol(s) |
Name of each exchange on which
registered |
| Common Stock, $0.01 par value per share |
BERY |
New York Stock Exchange |
Indicate by check
mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this
chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected
not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant
to Section 13(a) of the Exchange Act. ¨
| Item 1.01. | Entry into a Material Definitive Agreement. |
On February 6, 2024, Berry Global
Group, Inc., a Delaware corporation (the “Company”), and Treasure Holdco, Inc., a Delaware corporation and
wholly owned subsidiary of the Company (“Spinco”), entered into certain definitive agreements with Glatfelter
Corporation, a Pennsylvania corporation (“Glatfelter”), Treasure Merger Sub I, Inc., a Delaware corporation and a
wholly owned subsidiary of Glatfelter (“First Merger Sub”), and Treasure Merger Sub II, LLC, a Delaware limited
liability company and wholly owned subsidiary of Glatfelter (“Second Merger Sub” and together with First Merger Sub, the
“Merger Subs”). The definitive agreements provide for a series of transactions pursuant to which, among other things,
the Company will transfer the business, operations and activities that constitute the majority of its Health, Hygiene and
Specialties segment to include its global nonwovens and hygiene films business of the Company (the “(“HHNF
Business”) to Spinco, subject to the terms and conditions set forth in the definitive agreements (the
“Separation”). In connection with the Separation, Spinco will assume certain debt of the HHNF Business and will make
certain cash distributions to the Company. After the Separation, the Company will distribute to its stockholders 100% of the issued
and outstanding shares of common stock, par value $0.01 per share, of Spinco (the “Spinco Common Stock”) held by the
Company by way of either a pro rata dividend or, with Glatfelter’s consent, an exchange offer (the
“Distribution”). After the Distribution, First Merger Sub will be merged with and into Spinco (the “First Merger”), with Spinco as the
surviving corporation and a wholly owned subsidiary of Glatfelter, immediately following which Spinco will be merged with and into
Second Merger Sub, with Second Merger Sub as the surviving limited liability company and a wholly owned subsidiary of Glatfelter
(collectively, the “Merger”). Following the completion of the First Merger, the holders of the shares of common stock,
par value $1.00 per share, of the Company (the “Company Common Stock”) (as holders of Spinco Common Stock immediately
following the Distribution) will own 90% of the outstanding capital stock of Glatfelter, and shareholders of Glatfelter will own 10%
of the outstanding capital stock of Glatfelter, on a fully diluted basis. The transactions are expected to be tax-free to
stockholders of the Company and shareholders of Glatfelter, for U.S. federal income tax purposes, except to the extent that cash is
paid to stockholders of the Company in lieu of fractional shares in the Distribution or the Merger. Prior to the closing, the
Company will seek to obtain a private letter ruling from the Internal Revenue Service (the “IRS”) that the transactions
(including the Separation and the Distribution) will qualify as a tax-free reorganization under the Internal Revenue Code
(the “Code”).
The definitive agreements entered into in
connection with the transactions include (1) an RMT Transaction Agreement, dated February 6, 2024 (the “RMT Transaction
Agreement”), by and among the Company, Spinco, Glatfelter and Merger Subs, (2) a Separation and Distribution Agreement, dated
February 6, 2024 (the “Separation Agreement”), by and among the Company, Spinco and Glatfelter, (3) an Employee
Matters Agreement, dated as of February 6, 2024, by and among the Company, Spinco and Glatfelter, and (4) a Tax Matters Agreement,
dated as of February 6, 2024, by and among the Company, Spinco and Glatfelter.
The Separation Agreement
The Separation Agreement sets forth the
terms and conditions regarding the Separation of the HHNF Business from the Company. The Separation Agreement identifies and
provides for the transfer of certain assets of the Company to Spinco and the assumption of certain liabilities of the Company by
Spinco. The Separation Agreement further allocates other assets between Spinco and the Company and provides for various continuing
relationships between the Company’s group of companies and Spinco’s group of companies.
The Separation Agreement also governs the
rights and obligations of the Company and Spinco regarding the Distribution. Pursuant to the Separation Agreement, the Distribution may
be effected (i) by means of a pro rata dividend of Spinco Common Stock to the Company’s stockholders (the “Spin-Off”) or
(ii) with Glatfelter’s consent, by way of an offer to exchange shares of Spinco Common Stock for outstanding shares of Company
Common Stock (the “Exchange Offer”), followed by a pro rata, clean-up distribution to the Company’s stockholders
of the unsubscribed shares of Spinco Common Stock held by the Company that were not exchanged in the Exchange Offer.
In connection with the Separation, Spinco
will (1) assume debt of the HHNF Business, and (2) pay a cash dividend to the Company (the “Spinco Special Cash Payment”).
Consummation of the Distribution is subject
to various conditions, including, among other things, (1) the substantial completion of the Separation and payment by Spinco to the
Company of the Spinco Special Cash Payment, (2) the satisfaction or waiver of all conditions under the RMT Transaction Agreement,
and (3) the delivery to the board of directors of the Company of a solvency opinion by an independent appraisal firm in respect of
the solvency of Spinco and the solvency and surplus of the Company (such solvency opinion to be reasonably acceptable to the Company).
In addition to the foregoing, the Separation
Agreement also contains numerous other provisions relating to certain ongoing relationships among the parties, including indemnification,
sharing of financial information, treatment of nonpublic information, corporate records, assistance in litigation and dispute resolution.
The RMT Transaction Agreement
Pursuant to the RMT Transaction Agreement,
immediately following the consummation of the Distribution, First Merger Sub will be merged with and into Spinco, with Spinco surviving
as a wholly owned subsidiary of Glatfelter, immediately following which Spinco will be merged with and into Second Merger Sub, with Second
Merger Sub surviving as a wholly owned subsidiary of Glatfelter. On the closing date and prior to the effective time of the Merger, Glatfelter
will amend and restate its articles of incorporation to effect a reverse stock split and to authorize additional shares of its common
stock in order to ensure a sufficient number of shares are available for issuance to holders of the Company Common Stock in connection
with the Merger.
As a result of the First Merger, each share
of Spinco Common Stock then issued and outstanding (other than each share of Spinco Common Stock held by Spinco as treasury stock or by
Spinco or its subsidiaries, which will be cancelled without consideration) will automatically be converted into and become exchangeable
for the right to receive a number of shares of Glatfelter common stock such that the aggregate number of shares of Glatfelter common stock
issued to the holders of Company Common Stock as a result of the Merger represent 90% of the outstanding shares of Glatfelter common stock following the completion of the Merger. Glatfelter shareholders will continue to hold 10% of the outstanding
shares of Glatfelter common stock following completion of the Merger.
The RMT Transaction Agreement also
provides that, as of immediately following the effective time of the Merger, Glatfelter will set the size of its board of directors
(the “Glatfelter Board”) at nine members, consisting of the Chief Executive Officer of Glatfelter as of the effective
time of the Merger plus five additional directors designated by the Company’s board of directors, plus three directors
designated by Glatfelter’s board of directors. In addition, the RMT Transaction Agreement provides that Curt Begle, the
current President of the Company’s Health, Hygiene & Specialties Division, will be appointed as Chief Executive
Officer of the combined company.
Completion of the Merger is subject to the
satisfaction or waiver of certain closing conditions, including, among other things, (1) consummation of the Distribution; (2) approval
of the required transactions by Glatfelter’s shareholders; (3) the listing of Glatfelter common stock issuable to holders of
Spinco Common Stock on the NYSE; (4) receipt of applicable regulatory approvals, including the expiration or early termination of
the statutory waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and other required regulatory
approvals; (5) the absence of any law or order prohibiting the consummation of the transactions; (6) the effectiveness of the
registration statements to be filed by Glatfelter and Spinco with the Securities and Exchange Commission (the “SEC”) pursuant
to the RMT Transaction Agreement; (7) the absence of any material adverse effect (as defined in the RMT Transaction Agreement) on
either the HHNF Business or Glatfelter; (8) the receipt of a private letter ruling from the IRS
to the effect that the Distribution and certain related transactions will qualify for tax-free treatment under the Code; and (9) the Company’s receipt of the Spinco Special Cash Payment in accordance with
the terms of the Separation Agreement.
The Company, Spinco, Glatfelter and Merger
Subs each make certain customary representations, warranties and covenants, as applicable under the circumstances, in the RMT Transaction
Agreement.
In addition, Glatfelter and the Company have
agreed, among other things, that neither they nor any of their subsidiaries will (1) solicit alternative transactions or (2) enter
into discussions concerning, or provide information or data in connection with, alternative transactions, except under limited circumstances
described in the RMT Transaction Agreement. Glatfelter has agreed that it will be obligated to hold a meeting of its shareholders to vote
on the transaction even if the board of directors of Glatfelter has made an RMT Partner Change of Recommendation (as defined in the RMT
Transaction Agreement). However, in certain circumstances after the occurrence of a triggering event (as further described in the RMT
Transaction Agreement), the Company or Glatfelter may terminate the RMT Transaction Agreement to enter into definitive agreements for
a Spinco Superior Proposal or an RMT Partner Superior Proposal, respectively (each as defined in the RMT Transaction Agreement).
The RMT Transaction Agreement also contains
covenants relating to obtaining financing for the various payments and issuances that Spinco will be making in connection with the transactions
contemplated by the RMT Transaction Agreement and the Separation Agreement.
The RMT Transaction Agreement contains
certain customary termination rights for the Company and Glatfelter, including, without limitation, a right for either party to
terminate the RMT Transaction Agreement if the Merger is not consummated on or before the earlier of (1) August 6, 2025, and
(2) 45 days prior to the one-year anniversary of the expiration or termination of the waiting period under the HSR Act (the
“Outside Date”). Upon the termination of the RMT Transaction Agreement under specified circumstances, Glatfelter will be
required to pay the Company a termination fee of $10 million, or the Company will be required to pay Glatfelter a termination fee of
$10 million. Such circumstances would be in connection with certain terminations related to or following an RMT Partner Superior
Proposal, a Spinco Superior Proposal or an Intervening Event (each as defined in the RMT Transaction Agreement).
The RMT Transaction Agreement also provides
the methodology by which certain expenses will be borne.
The Commitment Letter
On February 6, 2024, Spinco entered into a commitment letter (the
“Commitment Letter”), by and among Spinco, Citigroup Global Markets Inc. (“Citi”), Wells Fargo Bank, National
Association (“WF”) and Wells Fargo Securities, LLC (“WF Securities”), pursuant to which (i) Citi and WF commit
to provide to Spinco a seven year first priority, senior secured term loan credit facility in the principal amount of $1,585
million (the “Term Loan Facility”), and (ii) Citi and WF Securities commit
to provide to Spinco a five (5) year first priority, senior secured revolving credit facility in the principal amount of $250 million
(the “ABL Facility”). The proceeds of the Term Loan Facility will be used by Spinco on the closing date to repay certain existing
indebtedness of Glatfelter, repay certain obligations of Spinco owing to certain subsidiaries of the Company, and to pay transaction fees
and expenses related to the foregoing and the Merger. The proceeds of the ABL Facility will be used for Spinco’s general corporate
purposes. The commitments under the Commitment Letter are subject to customary closing conditions.
The above descriptions of the RMT Transaction Agreement, the
Separation Agreement and the Commitment Letter have been included, to provide investors and securityholders with information
regarding the terms of such agreements. They are not intended to provide any other factual information about the Company, Glatfelter
or Spinco, or their respective subsidiaries or affiliates. The RMT Transaction Agreement and the Separation Agreement each contain
representations and warranties that the Company and Spinco, on the one hand, and Glatfelter and Merger Subs on the other hand, made
to each other as of specific dates. The assertions embodied in those representations and warranties were made solely for purposes of
the contracts between the parties to such agreements and may be subject to important qualifications and limitations agreed by the
parties in connection with negotiating the terms of such agreements. Moreover, some of those representations and warranties may not
be accurate or complete as of any specified date, may be subject to a contractual standard of materiality different from those
generally applicable to shareholders, or may have been used for the purpose of allocating risk between the parties rather than
establishing matters as facts. For the foregoing reasons, such representations and warranties should not be relied upon as
statements of factual information.
| Item 7.01. | Regulation FD Disclosure. |
On February 7, 2024, the Company and
Glatfelter issued a joint press release announcing the parties’ entry into definitive agreements in connection with a Reverse Morris
Trust transaction. A copy of this press release is furnished on Exhibit 99.1 hereto and is incorporated herein by reference.
On February 7, 2024, the Company
and Glatfelter held a joint investor call relating to the transactions contemplated by the definitive agreements. The Company and
Glatfelter made available on the investor relations section of their respective websites an investor presentation in connection with
the investor call. A copy of the investor presentation is furnished on Exhibit 99.2 hereto and is incorporated herein by
reference.
The information in this Item 7.01,
including the exhibit attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing by the Company under the Securities
Act of 1933 as amended, or the Securities Exchange Act of 1934, as amended, except as shall be expressly set forth by specific
reference in such filing.
Cautionary Statement Concerning Forward-Looking Statements
Statements in this release that are not historical,
including statements relating the expected timing, completion and effects of the proposed transaction between Berry and Glatfelter, are
considered “forward looking” within the meaning of the federal securities laws and are presented pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements because they contain words
such as “believes,” “expects,” “may,” “will,” “should,” “would,”
“could,” “seeks,” “approximately,” “intends,” “plans,” “estimates,”
“projects,” “outlook,” “anticipates” or “looking forward,” or similar expressions that
relate to strategy, plans, intentions, or expectations. All statements relating to estimates and statements about the expected timing
and structure of the proposed transaction, the ability of the parties to complete the proposed transaction, benefits of the transaction,
including future financial and operating results, the combined company’s plans, objectives, expectations and intentions, and other
statements that are not historical facts are forward-looking statements. In addition, senior management of Berry and Glatfelter, from
time to time make forward-looking public statements concerning expected future operations and performance and other developments.
Actual results may differ materially
from those that are expected due to a variety of factors, including without limitation: the occurrence of any event, change or other
circumstances that could give rise to the termination of the proposed transaction; the risk that Glatfelter shareholders may not
approve the transaction proposals; the risk that the necessary regulatory approvals may not be obtained or may be obtained subject
to conditions that are not anticipated; risks that any of the other closing conditions to the proposed transaction may not be
satisfied in a timely manner; risks that the anticipated tax treatment of the proposed transaction is not obtained; risks related to
potential litigation brought in connection with the proposed transaction; uncertainties as to the timing of the consummation of the
proposed transaction; unexpected costs, charges or expenses resulting from the proposed transaction; risks and costs related to the
implementation of the separation of Berry’s HHNF Business into a new entity (“Spinco”), including timing
anticipated to complete the separation; any changes to the configuration of the businesses included in the separation if
implemented; the risk that the integration of the combined companies is more difficult, time consuming or costly than expected;
risks related to financial community and rating agency perceptions of each of Berry and Glatfelter and its business, operations,
financial condition and the industry in which they operate; risks related to disruption of management time from ongoing business
operations due to the proposed transaction; failure to realize the benefits expected from the proposed transaction; effects of the
announcement, pendency or completion of the proposed transaction on the ability of the parties to retain customers and retain and
hire key personnel and maintain relationships with their counterparties, and on their operating results and businesses generally;
and other risk factors detailed from time to time in Glatfelter’s and Berry’s reports filed with the SEC, including
annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and other documents filed
with the SEC. These risks, as well as other risks associated with the proposed transaction, will be more fully discussed in the
registration statements, proxy statement/prospectus and other documents that will be filed with the SEC in connection with the
proposed transaction. The foregoing list of important factors may not contain all of the material factors that are important to you.
New factors may emerge from time to time, and it is not possible to either predict new factors or assess the potential effect of any
such new factors. Accordingly, readers should not place undue reliance on those statements. All forward-looking statements are based
upon information available as of the date hereof. All forward-looking statements are made only as of the date hereof and neither
Berry nor Glatfelter undertake any obligation to update or revise any forward-looking statement as a result of new information,
future events or otherwise, except as otherwise required by law.
Non-GAAP Financial Information
Non-GAAP financial information included
within this current report and accompanying materials is provided as a complement to the results provided in accordance with accounting
principles generally accepted in the United States of America (“GAAP”). Due to high variability and difficulty in predicting
items that impact cash from operating activities and capital expenditures, the Company is not able to provide a reconciliation between
projected free cash flow and the most comparable GAAP metric without unreasonable effort.
Additional Information and Where to Find
It
This communication may be deemed to be solicitation
material in respect of the proposed transaction between Berry and Glatfelter. In connection with the proposed transaction, Berry and Glatfelter
intend to file relevant materials with the SEC, including a registration statement on Form S-4 by Glatfelter that will contain a
proxy statement/prospectus relating to the proposed transaction. In addition, Spinco expects to file a registration statement in connection
with its separation from Berry. This communication is not a substitute for the registration statements, proxy statement/prospectus or
any other document which Berry and/or Glatfelter may file with the SEC. STOCKHOLDERS OF BERRY AND GLATFELTER ARE URGED TO READ ALL RELEVANT
DOCUMENTS FILED WITH THE SEC, INCLUDING THE REGISTRATION STATEMENT AND PROXY STATEMENT/PROSPECTUS, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain copies of the registration statements
and proxy statement/prospectus (when available) as well as other filings containing information about Berry and Glatfelter, as well as
the Spinco, without charge, at the SEC’s website, http://www.sec.gov. Copies of documents filed with the SEC by Berry or the Spinco
will be made available free of charge on Berry’s investor relations website at https://ir.berryglobal.com. Copies of documents filed
with the SEC by Glatfelter will be made available free of charge on Glatfelter's investor relations website at https://www.glatfelter.com/investors.
No Offer or Solicitation
This communication is for informational purposes
only and is not intended to and does not constitute an offer to sell, or the solicitation of an offer to sell, subscribe for or buy, or
a solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance or transfer of securities in any jurisdiction
in which such offer, sale or solicitation would be unlawful, prior to registration or qualification under the securities laws of any such
jurisdiction. No offer or sale of securities shall be made except by means of a prospectus meeting the requirements of Section 10
of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law.
Participants in Solicitation
Berry and its directors and executive officers,
and Glatfelter and its directors and executive officers, may be deemed to be participants in the solicitation of proxies from the holders
of Glatfelter capital stock and/or the offering of securities in respect of the proposed transaction. Information about the directors
and executive officers of Berry, including a description of their direct or indirect interests, by security holdings or otherwise, is
set forth under the caption “Security Ownership of Beneficial Owners and Management” in the definitive proxy statement for
Berry’s 2024 Annual Meeting of Stockholders, which was filed with the SEC on January 4, 2024 (https://www.sec.gov/ixviewer/ix.html?doc=/Archives/edgar/data/0001378992/000110465924001073/tm2325571d6_def14a.htm).
Information about the directors and executive officers of Glatfelter including a description of their direct or indirect interests, by
security holdings or otherwise, is set forth under the caption “Ownership of Company Stock” in the proxy statement for Glatfelter's
2023 Annual Meeting of Shareholders, which was filed with the SEC on March 31, 2023 (https://www.sec.gov/ixviewer/ix.html?doc=/Archives/edgar/data/0000041719/000004171923000012/glt-20230331.htm).
In addition, Curt Begle, the current President of Berry’s Health, Hygiene & Specialties Division, will be appointed
as Chief Executive Officer of the combined company. Investors may obtain additional information regarding the interest of such participants
by reading the proxy statement/prospectus regarding the proposed transaction when it becomes available.
| Item
9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| |
BERRY GLOBAL GROUP, INC. |
| |
(Registrant) |
| |
|
| Dated: February 7, 2024 |
By: |
/s/ Jason K. Greene |
| |
Name: |
Jason K. Greene |
| |
Title: |
Executive Vice President, Chief Legal Officer and Secretary |
Exhibit 99.1
 |
 |
News Release |
Berry Global and Glatfelter Announce Plans
for Tax-Free Spin-Off and Merger of Berry’s Health, Hygiene and Specialties Global Nonwovens and Films Business with Glatfelter,
Creating a Global Specialty Materials Leader
Combination creates
a large-scale global franchise with an industry-leading solution set serving attractive, growing specialty materials markets
Establishes leading
positions in the high value-added categories within the specialty materials industry, served by differentiated innovation capabilities
Transaction values
the combined company at $3.6 billion on an enterprise value basis, with pro forma revenue of ~$3.6 billion and Adj. EBITDA (1)
of ~$455 million
Berry and Glatfelter
shareholders to own 90% and 10% of the combined company, respectively. Berry to receive an approximate net $1 billion cash distribution
at closing
Enhances earnings power
with secular rebound and expected cost synergies of at least $50 million by year three
Tax-efficient Reverse
Morris Trust transaction allows for full shareholder participation in upside of combined company
Accelerates strategic
repositioning of Berry to a pure-play provider of innovative, sustainable global packaging solutions
Improves Glatfelter’s
leverage profile to increase shareholder value – transaction pro forma net leverage (2) of 4x
Meaningfully accelerates
Glatfelter’s strategy to further optimize product portfolio and strengthen strategic innovation and sustainability offerings
Significant step in
the optimization of Berry’s portfolio and the culmination of a comprehensive review to drive value creation for Berry shareholders
Berry and Glatfelter
to Host Joint Investor Conference Call, Wednesday February 7, 2024 at 8:30 AM Eastern Daylight Time
EVANSVILLE, IN &
CHARLOTTE, NC--(BUSINESS WIRE)—Feb. 7, 2024-- Berry Global Group, Inc. (NYSE:BERY) and Glatfelter Corporation (NYSE:GLT) announced
today they have entered into definitive agreements for Berry to spin-off and merge the majority of its Health, Hygiene and Specialties
segment to include its Global Nonwovens and Films business (“HHNF”) with Glatfelter, to create a leading, publicly-traded
company in the specialty materials industry. The Boards of Directors of Berry and Glatfelter have unanimously approved the transaction.
The new combined company
(“NewCo”) will become a global leader in the growing specialty materials industry, serving the world’s largest brand
owners across global end markets with favorable long-term growth dynamics. HHNF brings an extensive portfolio of proprietary technologies,
with a strong focus on healthcare, hygiene, and specialty end markets, while Glatfelter provides a broad range of innovation capabilities
and sustainability solutions. Together, the combined company will offer a highly complementary product suite, including both polymer-based
and fiber-based solutions, supported by strong innovation capabilities, with significant geographic diversification and a presence in
all major markets.
“This announcement
is the culmination of a comprehensive review of strategic alternatives to determine the value-maximizing path forward for Berry shareholders”,
said Kevin Kwilinski, Berry’s Chief Executive Officer. “We believe these two businesses, in combination, can drive significant
value for shareholders with complementary portfolios, positioning each for greater success. Following completion of the transaction, Berry
will become a pure-play provider of innovative, sustainable global packaging solutions, which we believe will deliver even more predictable
earnings growth for Berry shareholders. Additionally, we believe HHNF in combination with Glatfelter will thrive as an independent company
that is positioned to drive long-term growth with its global brand-owner customers.”
"The uniting of
our organizations creates a premier nonwovens supplier and a global leader in specialty materials, with the talent, technologies, scale,
and footprint to deliver commercial and operational excellence, and a wide range of solutions for our customers. Our combined company
is scaled to accelerate innovation and leverage our intellectual property over a large worldwide commercial platform and is well positioned
to deliver substantial shareholder value," said Thomas Fahnemann, Glatfelter's President and Chief Executive Officer.
Berry to Enhance its
Focus on Consumer Packaging Leadership
In September, Berry announced a
review of strategic alternatives for its Health, Hygiene & Specialties (‘HH&S’) segment. Today's announcement is the
culmination of a comprehensive review of strategic alternatives to determine the value-maximizing path forward for Berry shareholders.
The remaining HH&S businesses, including Berry’s tapes business, will be retained by Berry.
The proposed transaction
marks an important milestone in Berry’s transition to becoming a streamlined and focused provider of consumer packaging. Post-separation,
Berry will continue to offer industry-leading products, solutions, and material science to help customers achieve their commercial and
sustainability goals. Pro forma for the separation transaction, Berry generated approximately $10.2 billion of revenue and $1.8 billion
in Adjusted EBITDA for the last twelve months period end December 30, 2023. Furthermore, in conjunction with today’s announcement,
Berry will change the name of its Engineered Materials segment to Flexibles to showcase the continued evolution of this
segment towards high-value products and solutions.
Glatfelter to Deliver
Significant Shareholder Value and Platform for Future Growth
For Glatfelter, the proposed
transaction represents the next significant milestone in the Company’s time-tested strategy as a leading global supplier of specialty
materials. The combination of Berry’s HHNF business and Glatfelter provides meaningful scale given the complementary technology
and product portfolios, along with a platform for considerable growth in future periods. The transaction provides NewCo the opportunity
to deliver significant value creation for Glatfelter shareholders by immediately deleveraging Glatfelter’s balance sheet and increasing
the equity value of the overall enterprise, while also enhancing its credit profile with customers and suppliers. Glatfelter’s recent
focus on optimizing its portfolio, managing the price/cost spread dynamic, and driving commercial and operational excellence, along with
G&A cost discipline, provides the foundation to meaningfully contribute towards the overall success of NewCo.
Financial Highlights
Together, HHNF and Glatfelter
generated pro forma revenue of approximately $3.6 billion and Adjusted EBITDA (1) of approximately $455 million based on combined
results for the last twelve months (‘LTM’) period ended December 2023 for Berry and the LTM period ended September 2023 for
Glatfelter, along with expected cost synergies of $50 million and combined pro forma adjustments of $25 million to be realized by year
three.
| (1) | Adjusted/Operating
EBITDA are non-GAAP measures that refer to earnings before interest, taxes, depreciation,
and amortization, pro forma, and as further described as Operating EBITDA for the LTM period
ended December 2023 for Berry and Adjusted EBITDA for the LTM period ended September 2023
for Glatfelter, along with expected cost synergies of $50 million and combined pro forma
adjustments to be realized by year three. A reconciliation to the nearest GAAP can be found
in GLT’s September 10-Q for adjusted earnings and Berry numbers are a carveout of HH&S
and unaudited. |
| (2) | Pro
forma net leverage is a non-GAAP measure and refers to NewCo.’s net debt divided by
adjusted EBITDA |
Governance and Management
The new, publicly-traded
company, which will be renamed and rebranded by transaction close, will be led by Curt Begle, Berry’s current President of HH&S,
who will serve as CEO. Additional members of the combined company's senior management team will be announced at a later date.
“I am humbled and
honored to be trusted as the leader of this new global enterprise and its 8,700 skilled and dedicated team members. This combination positions
us to delight our customers, enhance the lives of our employees, and create value for our shareholders. Today’s announcement is
the first step in creating a pure-play leader in nonwovens and specialty materials well-positioned in growing, global markets. We will
increase the combined company’s relevance as a supplier of choice, through product innovation, superior service, and reliability.
Our combined, well-invested platforms will provide value-added product offerings with leading sustainability-driven solutions for brand-owner
customers globally,” stated Curt Begle, President of Berry’s Health, Hygiene & Specialties division.
The Board of Directors
of the combined company will initially be comprised of nine total members, consisting of six designated by Berry and three designated
by Glatfelter. The chairman will be designated by Glatfelter, and all directors will be named at a future date.
Strategic Rationale
of the Combination
| · | Creates a leading global competitor in the large
and growing specialty materials industry |
| · | Broadens substrate, product and end market mix,
combining highly complementary portfolios |
| · | Provides for significant geographic diversification
with a presence in all major markets |
| · | Scales resources to drive innovation and leverage
R&D across a large, global franchise |
| · | Combines extensive operational expertise, coupled
with deep industry knowledge and technical know-how |
| · | Enables significant synergy potential; expected
cost synergies $50 million composed of a combination of procurement, G&A and other operational improvement opportunities expected
by the third year following closing |
Transaction Details
The transaction is being
structured as a Reverse Morris Trust transaction and is intended to be tax-free to Berry, Glatfelter and their respective shareholders
for U.S. federal income tax purposes. Key details of the transaction include:
| · | Ownership: Berry shareholders will own
90% of the combined company's common shares upon consummation of the transaction. Glatfelter shareholders will own the remaining 10% of
the combined company. |
| · | Cash Proceeds: Berry is expected
to receive net cash proceeds of approximately $1 billion at close and intends to use these proceeds to repay existing debt. Berry expects
to maintain its existing capital allocation priorities following this transaction. |
| · | Financing: NewCo. has obtained committed
financing from Citigroup and Wells Fargo Bank, N.A. and expects to raise permanent debt financing by transaction close, resulting in net
leverage of approximately 4.0x, inclusive of Glatfelter’s $500 million 4.75% Senior Notes due 2029, which are anticipated to remain
outstanding. |
| · | Closing: Closing of the transaction
is expected to occur in the second half of calendar 2024, subject to various customary closing conditions, including regulatory approvals
and Glatfelter shareholder approval. No vote of Berry’s shareholders is required for the transaction. Employee representation will
be involved where applicable. |
| · | Pro Forma Impact to Berry: The transaction
is expected to be leverage neutral to Berry. |
Additionally, prior to
closing of the transaction, Glatfelter will complete a reverse stock split of all of its issued and outstanding common stock. The reverse
stock split ratio will be determined by Glatfelter and Berry, closer to the closing date of the transaction, and additional information
will be provided prior to the effective time of the reverse stock split.
Conference Call Details
Berry and Glatfelter
management will together discuss the transaction on a joint conference call/webcast scheduled for today at 8:30 a.m. ET. This call is
expected to last approximately 30 minutes. A copy of this release along with the investor presentation can be found on Glatfelter’s
investor website at www.glatfelter.com.
This will be followed
by a separate conference call to discuss Berry’s fiscal first quarter 2024 financial results at 10:00 a.m. ET today. Both calls
will be webcast live at the Company’s website at https://ir.berryglobal.com/financials. A new, simplified event registration
and access provides two ways to access the call. A replay of the webcast will be available via the same link on our website approximately
two hours after the completion of the call.
By Telephone
Participants may register
for the transaction announcement call here now or any time up to and during the time of the call, and will immediately receive
the dial-in number and a unique pin to access the call. While you may register at any time up to and during the time of the call, you
are encouraged to join the call 10 minutes prior to the start of the event.
Via the Internet
The transaction-related
conference call and accompanying webcast slides will also be broadcast live over the internet. To access the event, click on the following
link: https://ir.berryglobal.com/financials. A replay of the webcast will be available via the same link on our website approximately
two hours after the completion of the call.
Advisors
Citigroup Global Markets
Inc. and Wells Fargo are serving as financial advisors to Berry, and Bryan Cave Leighton Paisner LLP is serving as legal advisor to Berry.
J.P. Morgan Securities LLC is serving as financial advisor to Glatfelter, and King & Spalding LLP is serving as legal advisor.
Cautionary Statement
Concerning Forward-Looking Statements
Statements in this release
that are not historical, including statements relating the expected timing, completion and effects of the proposed transaction between
Berry and Glatfelter, are considered “forward looking” within the meaning of the federal securities laws and are presented
pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements
because they contain words such as “believes,” “expects,” “may,” “will,” “should,”
“would,” “could,” “seeks,” “approximately,” “intends,” “plans,”
“estimates,” “projects,” “outlook,” “anticipates” or “looking forward,” or
similar expressions that relate to strategy, plans, intentions, or expectations. All statements relating to estimates and statements about
the expected timing and structure of the proposed transaction, the ability of the parties to complete the proposed transaction, benefits
of the transaction, including future financial and operating results, the combined company’s plans, objectives, expectations and
intentions, and other statements that are not historical facts are forward-looking statements. In addition, senior management of Berry
and Glatfelter, from time to time make forward-looking public statements concerning expected future operations and performance and other
developments.
Actual results may differ
materially from those that are expected due to a variety of factors, including without limitation: the occurrence of any event, change
or other circumstances that could give rise to the termination of the proposed transaction; the risk that Glatfelter shareholders may
not approve the transaction proposals; the risk that the necessary regulatory approvals may not be obtained or may be obtained subject
to conditions that are not anticipated; risks that any of the other closing conditions to the proposed transaction may not be satisfied
in a timely manner; risks that the anticipated tax treatment of the proposed transaction is not obtained; risks related to potential litigation
brought in connection with the proposed transaction; uncertainties as to the timing of the consummation of the proposed transaction; unexpected
costs, charges or expenses resulting from the proposed transaction; risks and costs related to the implementation of the separation of
the Berry’s HH&S global nonwovens and films business into a new entity (“Spinco”), including timing anticipated
to complete the separation; any changes to the configuration of the businesses included in the separation if implemented; the risk that
the integration of the combined companies is more difficult, time consuming or costly than expected; risks related to financial community
and rating agency perceptions of each of Berry and Glatfelter and its business, operations, financial condition and the industry in which
they operate; risks related to disruption of management time from ongoing business operations due to the proposed transaction; failure
to realize the benefits expected from the proposed transaction; effects of the announcement, pendency or completion of the proposed transaction
on the ability of the parties to retain customers and retain and hire key personnel and maintain relationships with their counterparties,
and on their operating results and businesses generally; and other risk factors detailed from time to time in Glatfelter’s and Berry’s
reports filed with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and other
documents filed with the SEC. These risks, as well as other risks associated with the proposed transaction, will be more fully discussed
in the registration statements, proxy statement/prospectus and other documents that will be filed with the SEC in connection with the
proposed transaction. The foregoing list of important factors may not contain all of the material factors that are important to you. New
factors may emerge from time to time, and it is not possible to either predict new factors or assess the potential effect of any such
new factors. Accordingly, readers should not place undue reliance on those statements. All forward-looking statements are based upon information
available as of the date hereof. All forward-looking statements are made only as of the date hereof and neither Berry nor Glatfelter undertake
any obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise, except as
otherwise required by law.
Additional Information
and Where to Find It
This communication may be deemed to be solicitation
material in respect of the proposed transaction between Berry and Glatfelter. In connection with the proposed transaction, Berry and Glatfelter
intend to file relevant materials with the SEC, including a registration statement on Form S-4 by Glatfelter that will contain a proxy
statement/prospectus relating to the proposed transaction. In addition, Spinco expects to file a registration statement in connection
with its separation from Berry. This communication is not a substitute for the registration statements, proxy statement/prospectus or
any other document which Berry and/or Glatfelter may file with the SEC. STOCKHOLDERS OF BERRY AND GLATFELTER ARE URGED TO READ ALL RELEVANT
DOCUMENTS FILED WITH THE SEC, INCLUDING THE REGISTRATION STATEMENT AND PROXY STATEMENT/PROSPECTUS, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain copies of the registration statements
and proxy statement/prospectus (when available) as well as other filings containing information about Berry and Glatfelter, as well as
the Spinco, without charge, at the SEC’s website, http://www.sec.gov. Copies of documents filed with the SEC by Berry or the Spinco
will be made available free of charge on Berry’s investor relations website at https://ir.berryglobal.com. Copies of documents filed
with the SEC by Glatfelter will be made available free of charge on Glatfelter's investor relations website at https://www.glatfelter.com/investors.
No Offer or Solicitation
This communication is
for informational purposes only and is not intended to and does not constitute an offer to sell, or the solicitation of an offer to sell,
subscribe for or buy, or a solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance or transfer
of securities in any jurisdiction in which such offer, sale or solicitation would be unlawful, prior to registration or qualification
under the securities laws of any such jurisdiction. No offer or sale of securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law.
Participants in Solicitation
Berry and its directors and executive officers,
and Glatfelter and its directors and executive officers, may be deemed to be participants in the solicitation of proxies from the holders
of Glatfelter capital stock and/or the offering of securities in respect of the proposed transaction. Information about the directors
and executive officers of Berry, including a description of their direct or indirect interests, by security holdings or otherwise, is
set forth under the caption “Security Ownership of Beneficial Owners and Management” in the definitive proxy statement for
Berry’s 2024 Annual Meeting of Stockholders, which was filed with the SEC on January 4, 2024 (https://www.sec.gov/ixviewer/ix.html?doc=/Archives/edgar/data/0001378992/000110465924001073/tm2325571d6_def14a.htm).
Information about the directors and executive officers of Glatfelter including a description of their direct or indirect interests, by
security holdings or otherwise, is set forth under the caption “Ownership of Company Stock” in the proxy statement for Glatfelter's
2023 Annual Meeting of Shareholders, which was filed with the SEC on March 31, 2023 (https://www.sec.gov/ixviewer/ix.html?doc=/Archives/edgar/data/0000041719/000004171923000012/glt-20230331.htm).
In addition, Curt Begle, the current President of the Berry’s Health, Hygiene & Specialties Division, will be appointed as Chief
Executive Officer of the combined company. Investors may obtain additional information regarding the interest of such participants by
reading the proxy statement/prospectus regarding the proposed transaction when it becomes available.
About Berry
At Berry Global Group, Inc. (NYSE: BERY), we
create innovative packaging solutions that we believe make life better for people and the planet. We do this every day by leveraging
our unmatched global capabilities, sustainability leadership, and deep innovation expertise to serve customers of all sizes around the
world. Harnessing the strength in our diversity and industry-leading talent of over 40,000 global employees across more than 250 locations,
we partner with customers to develop, design, and manufacture innovative products with an eye toward the circular economy. The challenges
we solve and the innovations we pioneer benefit our customers at every stage of their journey. For more information, visit our website,
or connect with us on LinkedIn or Twitter. (BERY-F)
About Glatfelter
Glatfelter is a leading
global supplier of engineered materials with a strong focus on innovation and sustainability. The Company’s high-quality, technology-driven,
innovative, and customizable nonwovens solutions can be found in products that are Enhancing Everyday Life®. These include personal
care and hygiene products, food and beverage filtration, critical cleaning products, medical and personal protection, packaging products,
as well as home improvement and industrial applications. Headquartered in Charlotte, NC, the Company’s 2022 revenue was $1.5 billion
with approximately 2,980 employees worldwide. Glatfelter’s operations utilize a variety of manufacturing technologies including
airlaid, wetlaid and spunlace with fifteen manufacturing sites located in the United States, Canada, Germany, France, Spain, the United
Kingdom, and the Philippines. The Company has sales offices in all major geographies serving customers under the Glatfelter and Sontara®
brands. Additional information about the Company may be found on our website at www.glatfelter.com or connect with us on LinkedIn.
Berry Global, Inc.
Investor Contact
Dustin Stilwell
VP, Investor Relations
+1 812.306.2964
ir@berryglobal.com
Global Media Contact
Laci Scourfield
+1 812.250.3884
mediarelations@berryglobal.com
Glatfelter Corporation
Investor Contact
Ramesh Shettigar
+1 717.225.2746
Ramesh.Shettigar@glatfelter.com
Media Contact
Eileen L. Beck
+1 717.225.2793
Eileen.Beck@glatfelter.com
Exhibit 99.2
February 7, 2024 Creating a Global Leader in Specialty Materials for Attractive End Markets Berry Global and Glatfelter Plans for Tax - Free Spin - Off and Merger of Berry’s HH&S Global Nonwovens and Films Business with Glatfelter
Curt Begle President, Health, Hygiene & Specialties Division Kevin Kwilinski Chief Executive Officer Thomas Fahnemann Chief Executive Officer Mark Miles Chief Financial Officer 2 Today’s Presenters Ramesh Shettigar Chief Financial Officer & Treasurer
3 Safe Harbor Statements and Important Information Forward - Looking Statements Statements in this release that are not historical, including statements relating the expected timing, completion and effects of the proposed transaction between Berry and Glatfelter, are considered “forward looking” within the meaning of the federal securities laws and are presented pursuant to the safe harbor provisions of the Private Securities Litigation Ref orm Act of 1995. You can identify forward - looking statements because they contain words such as “believes,” “expects,” “may,” “will,” “should,” “would,” “could,” “seeks,” “approximately,” “intends,” “plans,” “estimates,” “projects,” “ou tlook,” “anticipates” or “looking forward,” or similar expressions that relate to strategy, plans, intentions, or expectations. All statements relating to estimates and statements about the expected timing and structure of the proposed tr ans action, the ability of the parties to complete the proposed transaction, benefits of the transaction, including future financial and operating results, the combined company’s plans, objectives, expectations and intentions, and other stat eme nts that are not historical facts are forward - looking statements. In addition, senior management of Berry and Glatfelter, from time to time make forward - looking public statements concerning expected future operations and performance a nd other developments. Actual results may differ materially from those that are expected due to a variety of factors, including without limitation: the occurrence of any event, change or other circumstances that could give rise to the termination of the proposed transaction; the risk that Glatfelter shareholders may not approve the transaction proposals; the risk that the necessary reg ula tory approvals may not be obtained or may be obtained subject to conditions that are not anticipated; risks that any of the other closing conditions to the proposed transaction may not be satisfied in a timely manner; risks that the antic ipa ted tax treatment of the proposed transaction is not obtained; risks related to potential litigation brought in connection with the proposed transaction; uncertainties as to the timing of the consummation of the proposed transaction; une xpe cted costs, charges or expenses resulting from the proposed transaction; risks and costs related to the implementation of the separation of the Berry’s HH&S global nonwovens and films business into a new entity (“ Spinco ”), including timing anticipated to complete the separation; any changes to the configuration of the businesses included in the separation if implemented; the risk that the integration of the combined companies is more difficult, time consuming o r c ostly than expected; risks related to financial community and rating agency perceptions of each of Berry and Glatfelter and its business, operations, financial condition and the industry in which they operate; risks related to disrupt ion of management time from ongoing business operations due to the proposed transaction; failure to realize the benefits expected from the proposed transaction; effects of the announcement, pendency or completion of the proposed transact ion on the ability of the parties to retain customers and retain and hire key personnel and maintain relationships with their counterparties, and on their operating results and businesses generally; and other risk factors deta ile d from time to time in Glatfelter’s and Berry’s reports filed with the SEC, including annual reports on Form 10 - K, quarterly reports on Form 10 - Q, current reports on Form 8 - K and other documents filed with the SEC. These risks, as well as othe r risks associated with the proposed transaction, will be more fully discussed in the registration statements, proxy statement/prospectus and other documents that will be filed with the SEC in connection with the proposed transaction. T he foregoing list of important factors may not contain all of the material factors that are important to you. New factors may emerge from time to time, and it is not possible to either predict new factors or assess the potential effect of any such new factors. Accordingly, readers should not place undue reliance on those statements. All forward - looking statements are based upon information available as of the date hereof. All forward - looking statements are made only as of the date hereof and neither Berry nor Glatfelter undertake any obligation to update or revise any forward - looking statement as a result of new information, future events or otherwise, except as otherwise required by law. These slides are not intended to be a stand - alone presentation but are for use in conjunction with the earnings call. This prese ntation should be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and the related notes thereto included in our public filings . Non - GAAP Financial Measures This presentation includes certain non-GAAP financial measures such as operating EBITDA, adjusted EBITDA, adjusted operating inc ome, adjusted earnings per share, free cash flow, and supplemental unaudited financial information intended to supplement, not substitute for, comparable measures under generally accepted accounting principles in the United States (G AAP ). Information reconciling forward - looking operating EBITDA is not provided because such information is not available without unreasonable effort due to the high variability, complexity, and low visibility with respect to certain Ite ms, including debt refinancing activity or other non - comparable items. These items are uncertain, depend on various factors, and could be material to our results computed in accordance with GAAP. Investors are urged to consider carefully th e c omparable GAAP measures and the reconciliations to those measures provided in our earnings release, presentations, and SEC filings. For further information about our non - GAAP measures, please see our earnings release, SEC filin gs. Further, percentage changes for revenue, Operating EBITDA, and Adjusted EPS are shown on "comparable basis" with the prior year period, which excludes the impacts of foreign currency along with any recent divestitures. We bel iev e this comparison provides meaningful and useful information to investors about the trends in our businesses and clarifies the impact of non - recurring items.
4 Safe Harbor Statements and Important Information (cont.) Additional Information and Where to Find It This communication may be deemed to be solicitation material in respect of the proposed transaction between Berry and Glatfel ter . In connection with the proposed transaction, Berry and Glatfelter intend to file relevant materials with the SEC, including a registration statement on Form S - 4 by Glatfelter that will contain a proxy statement/prospectus relating to the proposed transaction. In addition, Spinco expects to file a registration statement in connection with its separation from Berry. This communication is not a substitute for the registration statements, proxy statement/prospectus or any other document which Berry and/or Glatfelter may file with the SEC. STOCKHOLDERS OF BERRY AND GLATFELTER ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE REGISTRATION STATEMENT AND PROXY STATEM ENT /PROSPECTUS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain copies of the registration statements and pro xy statement/prospectus (when available) as well as other filings containing information about Berry and Glatfelter, as well as the Spinco , without charge, at the SEC’s website, http://www.sec.gov. Copies of documents filed with the SEC by Berry or the Spinco will be made available free of charge on Berry’s investor relations website at https://ir.berryglobal.com. Copies of documents filed with the SEC by Glatfelter will be made available free of charge on Gla tfe lter's investor relations website at https://www.glatfelter.com/investors . No Offer or Solicitation This communication is for informational purposes only and is not intended to and does not constitute an offer to sell, or the so licitation of an offer to sell, subscribe for or buy, or a solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, sale or solicitation wou ld be unlawful, prior to registration or qualification under the securities laws of any such jurisdiction. No offer or sale of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933 , a s amended, and otherwise in accordance with applicable law. Participants in Solicitation Berry and its directors and executive officers, and Glatfelter and its directors and executive officers, may be deemed to be par ticipants in the solicitation of proxies from the holders of Glatfelter capital stock and/or the offering of securities in respect of the proposed transaction. Information about the directors and executive officers of Berry, including a descript ion of their direct or indirect interests, by security holdings or otherwise, is set forth under the caption “Security Ownership of Beneficial Owners and Management” in the definitive proxy statement for Berry’s 2024 Annual Meeting of Stockhold ers , which was filed with the SEC on January 4, 2024 (https://www.sec.gov/ixviewer/ix.html?doc=/Archives/edgar/data/0001378992/000110465924001073/tm2325571d6_def14a.htm). Informa tio n about the directors and executive officers of Glatfelter including a description of their direct or indirect interests, by security holdings or otherwise, is set forth under the caption “Ownership of Company Stock” in the pro xy statement for Glatfelter's 2023 Annual Meeting of Shareholders, which was filed with the SEC on March 31, 2023 (https://www.sec.gov/ixviewer/ix.html?doc=/Archives/edgar/data/0000041719/000004171923000012/glt - 20230331.htm). In addition , Curt Begle, the current President of the Berry’s Health, Hygiene & Specialties Division, will be appointed as Chief Executive Officer of the combined company. Investors may obtain additional information regarding the inter est of such participants by reading the proxy statement/prospectus regarding the proposed transaction when it becomes available.
Transaction Summary Deal Structure Ownership Management & Governance Capital Structure & Financing Closing Culmination of a comprehensive review to determine highest value alternative for Berry shareholders ▪ The majority of Berry’s HH&S segment to include its Global Nonwovens and Films Business and Glatfelter (GLT) to combine via a Reverse Morris Trust transaction expected to be valued at approximately $3.6B ▪ Transaction expected to be tax - free to Berry, Glatfelter, and their respective shareholders ▪ Berry shareholders to own approximately 90% of the newly combined company or “NewCo” ▪ Glatfelter shareholders to own approximately 10% of NewCo ▪ Curt Begle, President of Berry HH&S, to lead NewCo as CEO ▪ Senior management team will include combined team of Berry and Glatfelter leaders ▪ Board of Directors comprised of 9 members, with 6 designated by Berry and 3 designated by Glatfelter ▪ Fully committed financing in place in support of transaction ▪ NewCo net leverage of 4.0x expected post transaction close; facilitating ~$1B net cash distribution to Berry at closing ▪ Improves Glatfelter’s leverage profile to increase shareholder value ▪ Existing Glatfelter senior notes due 2029 expected to remain in place; other debt to be retired ▪ Glatfelter to complete a reverse stock split prior to transaction close; ratio to be determined by GLT and BERY (1) ▪ Glatfelter shareholder vote required ▪ No shareholder vote required for Berry shareholders ▪ Targeted to close in the 2H of CY 2024, subject to customary closing conditions and regulatory approvals 5 (1) Prior to closing of the transaction, Glatfelter will complete a reverse stock split of all of its issued and outstanding comm on stock. The reverse stock split ratio is to be determined by Glatfelter and Berry. Additional information will be provided prior to the effective time of the reverse stock split.
Global Leader in Specialty Materials x Fast - growing home, health and hygiene end markets x Leadership with scale in all major geographies x Growth through innovation and operational excellence x Product portfolio focused on sustainable solutions x A leader in global nonwovens 6
NewCo well - positioned to serve the world’s best - known brand owners in fast - growing markets 54% 20% 26% 65% 25% 6% 5% 49% 22% 15% 14% $1.4B $2.2B Sales by End Market Global Customers $3.6B New Co EBITDA % margin ~$290M 13.2% ~$90M 6.4% ~$455M (1) 12.6% Home, Hygiene and PC Healthcare Home, Health, Hygiene, and PC Industrials/Other F&B Specialties Specialty Home, Health, Hygiene, and PC Industrial / Other F&B Specialties Note: HHS only includes Berry’s Global Nonwovens and Films Business References to revenue and Adj. EBITDA is December LTM 2023 for BERY and September LTM 2023 for GLT (1) Includes expected cost synergies of $50M and combined pro forma adjustments of $25M to be realized over 3 years Revenue Combined Enterprise Serving CPGs and Regional Players 7 HH&S
1 Percentages calculated as a proportion of sales based on each business’ FY2023A results 8 60% 40% Americas ROW Revenue $3.6B Manufacturing Locations Global leader with scale in all major geographies x Low - single to mid - single digit long - term growth outlook for the Americas Low - single to high - single digit long - term growth outlook for the ROW x 45 state - of - th e - art manufacturing locations x ~8,650 employees x 1,000+ customers x x Locations: Americas – 23, Europe – 18, Asia - Pacific - 4 New Co Significant Global Company 23 22
Broadest product offering in the industry for both polymer - based and fiber - based product applications Single - Serve Coffee Tea Bags Tabletop Decorative Laminate Filtration Media Disinfecting, Personal Care and Institutional Wipes Healthcare & Surgical Suite Baby, Adult and Feminine Care Ab sorbent Hygiene Components Geotextiles Laundry Care Cable Wrap Agriculture Bedding & Upholstery Building Wrap and Roofing Solutions Value - added niche businesses Sophisticated fiber - based businesses 9 HH&S HHS refers to the majority of Berry’s HH&S segment including its Global Nonwovens and Film businesses Wallcover Complementary Technology & Product Portfolios Tree Shelters Powerful Industry Brands Shared Applications FIBC Bags
Organic Growth Investments • Broad manufacturing platform with technology and sustainability leadership • Further penetration in key growth markets including: ‒ Asia ‒ Africa ‒ India Commercial & Operational Excellence • Prioritize customer relationships • Leverage global footprint • Focus on global innovation and R&D • Execute on productivity opportunities • Sustainability offerings Strategic Opportunities • Multiple strategic angles including: ‒ Adjacent markets ‒ Geographic expansion ‒ Product line extensions ‒ Differentiated technologies ‒ Synergy capture Mega Trends • Attractive growth trends in health, hygiene & personal care • Population growth coupled with rising standards of living in emerging markets • Substitution from reusable products to disposable specialty materials • Aging population driving adult incontinence & healthcare demand NewCo will benefit from market growth, operational execution, organic investments and M&A opportunities 10 Key Drivers of Growth for New Co
• Berry becomes a more focused “pure play” leading supplier of sustainable global packaging solutions • Unlocks value in Berry; shareholders can participate in potential upside of NewCo • Expect more consistent earnings growth and cash flow generation • Berry to receive net cash distribution of ~$1.0B and intends to use the proceeds to repay existing debt • Transaction expected to be tax - free to BERY and GLT shareholders Target close is in the 2H of calendar 2024 TRANSACTION BENEFITS TO BERRY 11 Creates two leading independent companies, each positioned for greater success TRANSACTION SUMMARY NewCo Value to BERY Pro forma Adjusted EBITDA $455M Transfer of GLT notes $0.5B New Financing (1) $1.3B $1.0B Equity Value – (BERY 90%; GLT 10%) (assumes ~8x Adj. EBITDA ) $1.8B $1.6B NewCo Enterprise Value $3.6B $2.6B (note: New financing uses: $1B distribution to Berry, $0.4B retirement of GLT debt , ($0.1B) cash less expenses) (note: Expect pro forma leverage for NewCo. to be ~4.0x (1) New financing net of contributed cash New Co expected to have enterprise value of approximately $3.6B Adjusted EBITDA refers earnings before interest, taxes, depreciation, and amortization, as further described as Operating EBI TDA for the last twelve month (‘LTM’) period ended December 30, 2023 for Berry and Adjusted EBITDA for the LTM period ended September 30, 2023 for Glatfelter, along with expected cost synergies of $50 million an d combined pro forma adjustments of $25M to be realized by year three. A reconciliation to the nearest GAAP can be found in GLT’s September 10 - Q for adjusted earnings and Berry numbers are a carveout o f HH&S and unaudited.
Kevin Kwilinski President and CEO Berry will simplify its portfolio, enhance stability of earnings and long - term growth and maintain its position as a sustainable global packaging solutions leader Key Segments Consumer Packaging – North America Consumer Packaging – International Flexibles 1 Pro forma estimates for Berry’s LTM period ended December 30, 2023 Flexibles formerly referred to as Engineered Materials Annual Revenue $10.2B Operating EBITDA $1.8B Global leadership positions; #1 or #2 in over 75% of the markets served ~30% Sales ~40% Sales ~30% Sales ~18% Op. EBITDA margin ~17% Op. EBITDA margin ~15% Op. EBITDA margin 12 Berry Global Group, Inc.
Q&A February 7, 2024 Announcement Call Supplemental Presentation 13
Dustin M. Stilwell VP, Head of Investor Relations Berry Global Group, Inc. 101 Oakley Street, 3 rd floor P. O. Box 959 Evansville, IN 47706 Tel: +1.812.306.2964 ir@berryglobal.com www.berryglobal.com Ramesh Shettigar Chief Financial Officer and Treasurer Glatfelter Corporation 4350 Congress Street Suite 600 Charlotte, NC 28209 Tel: +1.717.225.2746 www.glatfelter.com
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|
| X |
- DefinitionThe type of document being provided (such as 10-K, 10-Q, 485BPOS, etc). The document type is limited to the same value as the supporting SEC submission type, or the word 'Other'.
| Name: |
dei_DocumentType |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:submissionTypeItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionAddress Line 1 such as Attn, Building Name, Street Name
| Name: |
dei_EntityAddressAddressLine1 |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- Definition
+ References
+ Details
| Name: |
dei_EntityAddressCityOrTown |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionCode for the postal or zip code
| Name: |
dei_EntityAddressPostalZipCode |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionName of the state or province.
| Name: |
dei_EntityAddressStateOrProvince |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:stateOrProvinceItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionA unique 10-digit SEC-issued value to identify entities that have filed disclosures with the SEC. It is commonly abbreviated as CIK. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityCentralIndexKey |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:centralIndexKeyItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionIndicate if registrant meets the emerging growth company criteria. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityEmergingGrowthCompany |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionCommission file number. The field allows up to 17 characters. The prefix may contain 1-3 digits, the sequence number may contain 1-8 digits, the optional suffix may contain 1-4 characters, and the fields are separated with a hyphen.
| Name: |
dei_EntityFileNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:fileNumberItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTwo-character EDGAR code representing the state or country of incorporation.
| Name: |
dei_EntityIncorporationStateCountryCode |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:edgarStateCountryItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionThe exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityRegistrantName |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionThe Tax Identification Number (TIN), also known as an Employer Identification Number (EIN), is a unique 9-digit value assigned by the IRS. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityTaxIdentificationNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:employerIdItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionLocal phone number for entity.
| Name: |
dei_LocalPhoneNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 13e
-Subsection 4c
| Name: |
dei_PreCommencementIssuerTenderOffer |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 14d
-Subsection 2b
| Name: |
dei_PreCommencementTenderOffer |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTitle of a 12(b) registered security. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b
| Name: |
dei_Security12bTitle |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:securityTitleItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionName of the Exchange on which a security is registered. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection d1-1
| Name: |
dei_SecurityExchangeName |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:edgarExchangeCodeItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Section 14a
-Number 240
-Subsection 12
| Name: |
dei_SolicitingMaterial |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTrading symbol of an instrument as listed on an exchange.
| Name: |
dei_TradingSymbol |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:tradingSymbolItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Securities Act
-Number 230
-Section 425
| Name: |
dei_WrittenCommunications |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
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