Veritiv 2Q Sales & Profits Slide Ahead of Going Private - Modern Distribution Management

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Veritiv 2Q Sales & Profits Slide Ahead of Going Private

The company announced its 2Q earnings one day after saying it would be acquired by Clayton, Dubilier & Rice for $2.3B.
Veritiv
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One day after announcing it would be acquired by Clayton, Dubilier & Rice for $2.3B, Veritiv Corporation announced its 2023 second-quarter earnings, which showed net sales of $1.5 billion, a decrease of 20% from last year. Organic sales decreased 15.4% compared with 2Q 2022.

Net income for 2Q 2023 was $70.7 million, compared to $91.1 million in the prior year, a decrease of 22.4%. Adjusted EBITDA for the quarter was $112.2 million, a decrease of 17.7% from the prior year. Adjusted EBITDA margin was 7.7%, an increase of 20 basis points from 2Q 2023.

For the first six months of 2023, net sales were $3.0 billion, a decrease of 19.3% from the prior year. During that period, organic sales decreased 11.7%, Veritiv said.

Adjusted EBITDA for both Packaging and Facility Solutions improved sequentially and on a year-over-year basis.

“This strong performance partially offset continued intense industry-wide destocking and slowing demand headwinds in Print Solutions, resulting in record second quarter consolidated Adjusted EBITDA margin,” said CEPO Sal Abbate.

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With 2022 revenue of $7.1 billion, Veritiv appeared on MDM’s 2023 Top JanSan Distributors List (unranked).

The company announced Aug. 7 that it would be acquired by CD&R. The deal represents a 31% premium over Atlanta-based Veritiv’s 30-day average stock price of $129.89 and about a 20% premium over Aug. 7’s closing price of $141.21. Each share of Veritiv common stock will be entitled to receive $170 in cash immediately following transaction closing, which is expected in 2023’s fourth quarter.

The deal is contingent upon shareholder approval and other customary closing conditions.

“I am excited to have reached an agreement with an affiliate of Clayton, Dubilier & Rice, LLC (CD&R) to acquire Veritiv, which we believe delivers substantial value to our shareholders,” Abbate said. “This is a testament to our team’s hard work and dedication over the past several years as the successful execution of our commercial and operational excellence strategies fundamentally improved our business. The transaction will further enhance our resources and offer greater financial and operational flexibility as we deliver innovative and sustainable solutions to our customers.”

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