North America's largest thermoformer plans to go public through an initial public offering.

Lake Forest, Ill.-based Pactiv Evergreen Inc. filed a preliminary prospectus with the U.S. Securities and Exchange Commission on Aug. 24, detailing plans for a stock offering. The company describes itself as the largest manufacturer and distributor of fresh foodservice and food merchandising products and fresh beverage cartons in North America.

The company is currently named Reynolds Group Holdings Ltd. of Auckland, New Zealand, and is owned by billionaire Graeme Hart. But the Pactiv name is well known in the plastics market: Reynolds Group bought Pactiv Corp. in 2011 for about $6 billion.

Pactiv Evergreen is a much different company today. The old Pactiv's business included the Hefty, Presto and Slide-Rite plastics brands. Those were spun off in a separate IPO in January as Reynolds Consumer Products Inc.

The Reynolds Consumer Products IPO raised $1.2 billion. The Pactiv Evergreen prospectus says its IPO will raise up to $100 million, but investment firm Renaissance Capital said that is likely a placeholder and that the actual offering could raise up to $750 million.

Plastics News has estimated Pactiv's thermoforming sales at $2.88 billion and its film manufacturing at $184 million. The prospectus does not break out the company's sales by process, but it does give more details about the operations, which are heavily, but not exclusively, focused on plastics processing.

The company, which is headed by CEO John McGrath, posted 2019 sales of $7.11 billion and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $1.04 billion. Nearly all the sales are in North America, with 86 percent from the United States and 8 percent from Canada and Mexico, combined.

Pactiv Evergreen has about 15,000 employees at 46 manufacturing and 27 distribution plants. Its substrates include conventional plastics, bio-based resins, plant- and paper-based fiber and aluminum.

Most of the plastic products are in the foodservice category, with products including food containers, hot and cold cups, lids, dinnerware and other items used by chain restaurants, convenience stores and institutions including schools and hospitals.

The company claims to have the No. 1 or No. 2 market share in products including containers, utensils, cafeteria trays, meat and poultry trays. It claims to be No. 2 or No. 3 in cups and lids, bakery and snack containers, and fruit and produce containers. Cups and lids accounted for 19 percent of 2019 sales, which was the largest segment for Pactiv. The second largest was paperboard cartons for beverages including milk, which accounted for 16 percent of sales.

The company stressed in an Aug. 24 news release that there is no guarantee that the IPO will be completed.

Graeme Hart has been maneuvering in recent months to pay down corporate debt, most recently selling bonds for Graham Packaging Co. Inc., a major North American blow molder and another part of his plastics packaging empire. Last year, Hart also sold a large chunk of the Closure Systems International business.

Tim Burns, senior adviser at Cranial Capital in Cleveland, said in a recent phone interview that Hart is "constantly scouring his portfolio to see what can be sold to refinance the debt."

Hart started building the plastics business in 2006 through deals with Carter Holt Harvey, International Paper, SIG, Alcoa, Pactiv and Graham Packaging.

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