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Packaging IPOs Struggle

BMO Capital Markets, Chicago, recently examined this year’s performance of initial public offerings (IPOs) in the packaging industry. It notes that over the last few years packaging hasn’t been an active sector for IPO volume. However, this year there have been four packaging IPOs: three in Europe and one in the U.S.

Its conclusion? This year industrial IPOs have declined in value since listing. Packaging company stocks that had IPOs this year have also declined in value since the IPO to a greater degree than the overall stock market where they were listed. However, packaging industry stocks experienced an increase in value since the beginning of the year.

Each of the four packaging companies that had an IPO this year (Smurfit Kappa, Gerresheimer AG, BWAY Holding, and Mondi), have declined since the IPO. After one month, each of the IPOs experienced a greater decline in value from offering price than the respective exchanges they were listed on, except Gerresheimer.

On March 14, Smurfit Kappa Group filed its IPO on the Irish Stock Exchange. The stock appreciated in value by 15 percent by the end of the first month since its IPO. However, it is now valued at 15.6 percent below its IPO. On July 2, Mondi plc filed its IPO. Since the IPO, the stock declined by 18.6 percent.

Turning to packaging industry stock performance, the BMO Capital Markets North American and European packaging indices have both increased in value since the beginning of 2007.

The European index experienced the most significant increase in value this year, rising 17 percent since Jan. 1 and outperforming the broader London Stock Exchange.

The North American packaging index increased 9 percent over the same period, performing close to New York Stock Exchange movement.

For more information on this report, call Managing Director Doug Lawson at 312-461-5471 or email doug.lawson@bmo.com. OBM

Callout: However, packaging industry stocks experienced an increase in value since the beginning of the year.