The figures behind Coulson’s ‘cool’ €1.5bn

GOOD news for Ardagh chairman Paul Coulson. He launched his long-awaited IPO, and based on valuation estimates his 36pc stake in the glass and metal container giant is valued at around €1.5bn. It’s a long way from the old days of the small sleepy glass bottle manufacturer in Ringsend of the 1990s. Back then Ardagh used to be criticised for having the cash but not the “bottle”, as it were, to press on with acquisitions.

But Coulson certainly made up for that after taking the firm private and putting together a series of extraordinarily huge deals. The massive value of Coulson’s personal stake is based on what investors are paying for new shares in the company equivalent to around 7pc of the equity.

It gives him the most valuable stake of any director of an Irish plc in the company they run.

That honour used to rest with Tony O’Reilly when his shares in Independent News & Media hit €500m at one point.

The obvious comparison today is with the market value of Michael O’Leary’s 4pc stake in Ryanair, which is valued at around €705m. Coulson’s stake is more than double it.

The comparison is interesting. O’Leary’s shareholding in Ryanair is in a company with high levels of liquidity in its stock, which has been internationally traded for two decades. It pays a dividend and the group is on a very strong growth trajectory.

The other big factor is debt. Ryanair’s EBITDA in full year 2016 was around €1.4bn on revenues of €4.6bn. It turned in a profit of €1.2bn.

Ardagh has sales of around €7.7bn and EBITDA of around €1.2bn. But its €7bn net debt is more than double Ryanair’s €3bn.

There is no doubt that Coulson and his management team have brought the business to an extraordinary level, with more than 23,000 employees at over 100 facilities.

But when it comes to putting a value on anybody’s stake in anything, it really depends on what someone is willing to pay for it. Ardagh is raising around €300m from the IPO share sale, which will be used to reduce debt.

Coulson has managed the balance sheet tightly in the run up to the float after several years of ballooning debt. He has refinanced older debt at lower rates.

He has reached a stage where the only debt due before 2021 is a $265m (€249m) bond payable in 2019. This will give Ardagh some headroom to drive forward with the businesses it has, repay debt and perhaps gradually sell more equity into the market. The next few years at Ardagh will be about maximising the return from the businesses it has rather than eyeing up the next big deal. A lot done, more to do, as they say.