Apollo preparing for a windfall?
The Debtwire news service has an interesting report today that speculates on how private equity firm Apollo Management could be about to cash in on its investments in Pliant Corp. and Berry Plastics Corp.
Apollo Management has sunk at least $1 billion into the two companies since 2005, according to the report. "As the global recession squeezed sector demand and commodity fluctuations whiplashed costs, the challenges for the private equity firm to make good on both investments grew steeper.
"But Pliant's imminent exit from bankruptcy sets the stage for a merger of the two portfolio companies and, if all goes well, an IPO that could land Apollo a turnaround windfall."
The story, attributed to four unnamed sources, goes on to speculate about the potential value of Pliant and Berry, assuming the economy improves, the companies hit their profit targets, and they successfully complete an initial public offering.
Interesting stuff. Plastics company IPOs have been few and far between the past few years. Plastics News tracks publicly traded processors, and the fact is that we've lost more publicly trade companies (some to private equity, some to bankruptcy) than we've gained.
Perhaps Berry will be the first of a new wave of publicly traded plastics packaging companies. Are investors ready?