Ball Corporation is to undertake an accelerated stock repurchase plan worth approximately US$200m as it seeks to use some of the free cash flow that has been generated by its aerospace division.
Ball announced on 1 February that it has entered into a…
Ball Corporation is to undertake an accelerated stock repurchase plan worth approximately US$200m as it seeks to use some of the free cash flow that has been generated by its aerospace division.
Ball announced on 1 February that it has entered into a privately-negotiated stock repurchase transaction with JP Morgan that will be funded via cash-on-hand and available borrowings. Ball estimates that the buy back will reduce its outstanding common stock by around 5.1 million shares.
Commenting on the deal, Scott Morrison, senior vice president and chief financial officer, said: “Ball’s aerospace businesses continues to generate a significant amount of free cash flow, and today’s announcement is consistent with our balanced capital deployment strategy which includes returning value to shareholders in the form of share buybacks.”
In the company’s recent Q4 2011 results, Bell revealed that it generated over US$500m of full year free cash flow after spending nearly US$250m for growth capital. During 2011, the company returned all of its free cash flow to shareholders via net share buyback of US$474m and dividends of US$46m. The company expects 2012 free cash flow to be in the range of US$450m.
In its results conference call, Bell president and CEO John Hayes said that its aerospace and technologies business posted double-digit EBIT margins for the full year and had a backlog of US$897m.
