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Based in Evansville, IN, Berry Plastics Group (BERY) has scheduled a $500 million IPO with a market capitalization of $1.9 billion at a price range mid-point of $17 for Thursday, October 4, 2012.

Eight IPOs are scheduled for the week of October 1. Full IPO calendar available here.

S-1A filed September 19, 2012

Manager, Joint Managers: BofA; Citigroup; Barclays; Deutsche
Co Managers: Credit Suisse; Goldman; Baird; Lazard; Wells Fargo; SunTrust Robinson; Lebenthal; Apollo Global Securities

CONCLUSION
Avoid. BERY is yet another over-leveraged, over-priced IPO from Apollo Management Group, which is not known for leaving any money on the table for IPO investors.

DEBT NOT SUSTAINABLE
Even including the "goodwill intangible water" on the balance sheet, BERY will has a negative book value of -$337 million post-IPO.

Even worse, subtracting out the "goodwill intangible water" on the balance sheet, BERY has a negative tangible book value of over -$3 billion.

There's simply no way that debt can be paid down from operations, with a 17% gross margin and recent interest payments alone of 7% of revenue.

Valuation Ratios

IPO Mrkt

Price /

Price /

Price /

Price /

% offered

Annualizing June 2012 9 mos

Cap (MM)

Sales

Earnings

BookValue

TangibleBV

in IPO

Berry Plastics Group (BERY)

$1,914

0.40

-72

-5.9

-0.6

26%

Glossary of IPO Analysis terms

BUSINESS
BERY believes it is a leading provider of value-added plastic consumer packaging and engineered materials with a 30-year track record of delivering high-quality customized solutions to customers.

BERY has been one of the most active acquirers of plastic packaging businesses globally, having acquired more than 30 businesses since 1988, including 11 acquisitions completed in the past six years.

PRINCIPAL STOCKHOLDERS
Principal stockholders are investment funds affiliated with or managed by Apollo Global Management, LLC, as well as investment funds affiliated with or managed by Graham Partners, Inc.

USE OF PROCEEDS
BERY expects to net $468 million from its IPO. Proceeds are allocated to repay $455 million of 11% Senior Subordinated Notes due September 15, 2016.

Disclaimer: This BERY IPO report is based on a reading and analysis of BERY's S-1 filing, which can be found here, and a separate, independent analysis by IPOdesktop.com. There are no unattributed direct quotes in this article.

Source: IPO Preview: Berry Plastics Group