The Orora Ltd (ASX: ORA) share price has returned from its suspension on Wednesday and crashed deep in the red.
In early trade, the packaging company's shares are down 21% to $2.77.
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Why is the Orora share price crashing?
The Orora share price is falling today after the company announced the successful completion of its fully underwritten institutional placement and the accelerated institutional component of a non-renounceable entitlement offer.
According to the release, the company attracted strong support from both existing and new institutional shareholders and was able to raise approximately $1,118 million at an offer price of $2.70 per new share. This represents a 21.3% discount to its last close price of $3.43.
In respect to the institutional entitlement offer, approximately 83% of entitlements available to eligible institutional investors were taken up.
Why is Orora raising funds?
As we covered here yesterday, Orora is raising funds to acquire Saverglass SAS for $2.156 billion.
Saverglass is a premium global bottle maker that designs and manufactures high-end bottles with unique integrated decoration capabilities for the premium and ultra-premium spirit and wine markets.
The price tag represents an implied multiple of 7.7 times adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA). The acquisition is expected to be mid-single-digit earnings per share (EPS) accretive (including full run-rate synergies) in the first full financial year of ownership.
Orora CEO Brian Lowe said:
We are pleased with the strong support shown by new and existing shareholders for the equity raising and the acquisition of Saverglass, which further strengthens our existing glass business, establishing Orora as a global player of scale in attractive premium segments.
Orora will now push ahead with its retail entitlement offer.
