Graphic Packaging set to acquire Greif’s Consumer Packaging Group Business in US$85 million deal
03 Mar 2020 --- Graphic Packaging, a leading provider of packaging solutions to food, beverage, foodservice, and other consumer products companies, has secured a definitive agreement to acquire the Consumer Packaging Group business from Greif for approximately US$85 million. The transaction is expected to close in the first quarter of 2020, subject to standard closing conditions.
US-headquartered Graphic Packaging will acquire seven converting facilities across the US that produce over US$200 million in annual revenue. The business is expected to generate approximately US$20 million in annualized EBITDA, including synergies, over the 24-month period after the successful completion of the acquisition.
“We are excited to announce the acquisition of the Consumer Packaging Group business from Greif. The transaction further diversifies our end-markets and enhances our service capabilities to growing mid-sized consumer goods and foodservice customers,” comments Mike Doss, President and CEO of Graphic Packaging.
“The continued strategic investments we are making in our integrated mill and converting platform reflect our commitment to existing and new customers to provide the industry's most efficient production of the highest quality paperboard into sustainable packaging solutions,” adds Doss.
“We are pleased with the conclusion of the CPG strategic review process,” notes Pete Watson, President and CEO of Grief. “The sale of CPG allows us to de-lever our balance sheet and optimize capital allocation plans. By divesting these assets, we can refocus our business on our core industrial franchise and our stated strategic growth priorities in Intermediate Bulk Container production and reconditioning and containerboard integration.”
Graphic Packaging has also assessed the impact of recently announced RISI Pulp and Paper market price changes and its current expectations for commodity input cost inflation. The supplier remains committed to its 2020 Adjusted EBITDA and cash flow guidance provided on the fourth quarter and full year 2019 financial results call held January 28, 2020. Graphic Packaging will update 2020 projections to include the Consumer Packaging Group acquisition from Greif after the successful completion of the transaction.
In February, Graphic Packaging International launched a line of fiber-based trays called PaperSeal, which replace Modified Atmosphere and Vacuum Skin Packaging plastic trays with a new barrier-lined paperboard alternative. Using up to 90 percent paperboard, the trays are designed for the film liner to be easily separated from the paperboard after use. This facilitates the recyclability of the paperboard portion of the tray, which contributes to a circular economy.
Edited by Joshua Poole
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