One of my invested ASX 300 companies has decided to sell non-essential businesses in North America and focus on its core competencies. Orora Limited (ASX:ORA) has announced in mid December re its successful completion of the sale of its North American packaging solutions business. The enterprise value of the transaction is A$1.775 billion and net proceeds after tax and costs of sale will be approximately A$1.7 billion.
As a corporate advisor/investor, I will invest into those ASX companies that have their well-defined business growth decision. I trust ORA is a good example. It ticks all my expectation, i.e.
1. Improved Focus on Core Strengths: Divesting non-core businesses allows ORA to reallocate resources—capital, talent, and management focus—to areas where it has a competitive advantage. Now, ORA is a GLOBAL specialised packaging provider for the beverage industry, focusing on core glass and cans packaging businesses.
2. Financial Benefits: In this uncertainty world, cash is king. ORA now has immediate cash to reduce debt (with a much stronger balance sheet), invest in core operations, or return value to shareholders.
3. Operational Efficiency: Divesting non-core businesses simplifies ORA’s organization, reduces complexity, and makes it easier to implement strategic initiatives on glass and cans packaging. Spare cash can be used to expand ORA’s cans processing capacity in Queensland.
4. Enhanced Stakeholder Value: ORA commences returning proceeds from the transaction to shareholders in the form of an on-market share buy-back. An initial commitment of up to 10% of the shares on issue (approximately A$320 million).
As Christmas and New Year holidays are coming, I wish you and your family a Merry Christmas and Happy New Year. Let’s enjoy our wonderful holidays and busy again in 2025. If you are interested to discuss more about business growth and develop a practical business growth strategy in 2025, please write email to below. Thank you.
Joseph Tse
Vice President (Venture Incubator & Business Growth)
副总裁 (风险投资孵化器与业务增长)
Email: [email protected]
