ACCO eyes international growth, will use cash generation to delever

By Lisa Kerner

Charlotte, N.C., May 21 - ACCO Brands Corp. is a "a scale player in a global industry that is continuing to consolidate," said executive vice president and chief financial officer Neal Fenwick during a presentation at the Barclays 2013 High Yield and Syndicated Loan Conference in Chicago on Tuesday.

According to Fenwick, ACCO's vision is to be the leading playing in the categories it serves and to capitalize on all the strategic opportunities that become available, with an eye towards global expansion.

ACCO's expansion plans got a big boost from the company's acquisitions of MeadWestvaco's Consumer & Office Products business in May of 2012, which made ACCO number one in Brazil, said Fenwick.

Currently, the majority of ACCO's business comes from the United States.

"We believe we're able to generate at least $150 million of free cash flow each year," Fenwick said.

The priority for that cash flow, according to the CFO, is to get the company's leverage down to target range of 2.5 times to 3 times.

Following the Mead acquisition, ACCO was able to pay off $200 million of debt.

With consistent delevering, ACCO has reduced its leverage since the Mead acquisition to 3.7 times from 4.1 times.

The company's debt at May 13 was about $1 billion, and its cash interest weighted average was 4.62%, according to the presentation.

Fenwick said last week ACCO refinanced its bank debt.

"The main reason for that was fundamentally due to a lower interest-rate environment," he said.

ACCO is a Lincolnshire, Ill.-based office supply manufacturer.

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