Stock of the day: Orora Limited
Orora divests its North American packaging business for $1.8 billion to focus on core operations and reduce debt.
[AI generated]
This video was created on 4 September for IG audiences by ausbiz.
Stock of the day: Orora Limited (ASX:ORA)
Details of the Orora's strategic divestment
In a significant move, Orora Limited has sold its North American packaging business to US-based Veritiv for $1.8 billion, an earnings before interest, taxes, depreciation, and amortization (EBITDA) multiple of 9.9 based on FY24 projections.. This sale marks a strategic pivot towards future growth and financial health.
After taxes, Orora expects to net about $1.7 billion in cash, significantly boosting its financial position. CEO Brian Lowe views this sale as the beginning of a new era for Orora, highlighted by planned expansions at the Rockley Cans facility in Queensland.
Market response and strategic focus
The market has responded positively to Orora Limited's move, appreciating its efforts to streamline operations and reduce debt. However, challenges remain from past decisions, such as the acquisition of Sabreglass in France for $2.2 billion, which underperformed expectations. This French company specializes in uniquely designed bottles for high-end drinks, a niche but problematic area for Orora.
This recent sale not only addresses financial pressures but also refocuses Orora on its primary business of drinks packaging. This strategy includes both Sabreglass and its other international operations.
The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.
Explore the markets with our free course
Learn how shares work – and discover the wide range of markets you can trade CDFs on – with IG Academy's free ’introducing the financial markets’ course.
Put learning into action
Try out what you’ve learned in this shares strategy article risk-free in your demo account.
Ready to trade shares?
Put the lessons in this article to use in a live account – upgrading is quick and easy.
- Trade over 12 000 popular global stocks
- Protect your capital with risk management tools
- React to breaking news with out-of-hours trading on 70 key US stocks
Inspired to trade?
Put your new knowledge into practice. Log in to your account now.
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
