Graphic Packaging Holding Company to Acquire Contego Cartons
Monday, November 26, 2012
Press release from the issuing company
- Creates a leading position in the European food and consumer products folding carton market
- Enhances Graphic Packaging's position in Europe by growing its operating footprint, expanding into new markets and providing new opportunities for growth
- Combination of Graphic Packaging's existing beverage carton business with Contego's food and consumer products carton business creates new diversified platform
- Contego Cartons had trailing twelve month sales of approximately $260 million and EBITDA of nearly $19 million
- Company to pay approximately £71 million in cash and assume approximately £10 million in other net liabilities in an all cash transaction to be funded using existing liquidity sources
- Expect to generate $8-$10 million of synergies over next two years and be accretive to earnings in first full year after integration
Graphic Packaging Holding Company, a leading provider of packaging solutions to food, beverage and other consumer products companies, today announced an agreement to acquire Contego Cartons, a leading food and consumer product packaging company based in the United Kingdom. Contego is owned by Platinum Equity.
"We are excited about the acquisition of Contego's Food and Consumer Carton business as it extends Graphic Packaging into new end markets, expands the Company's global footprint and provides new opportunities for growth," said David Scheible, Graphic Packaging's President and Chief Executive Officer. "Contego operates throughout Western Europe with state of the art facilities in the U.K. and the Netherlands. Combining Graphic's current European business focused in the beverage markets with Contego's strong market share position in the European food and consumer products markets will allow us to broaden our customer base and enhance our competitive positioning. Similar to our strategy in the U.S., we are committed to growing our European business around food and beverage markets and optimizing our supply chain footprint around our customers' needs. There are solid synergies in this combination and we believe the Contego Cartons acquisition is an important step in strengthening our competitive positioning in Europe."
Under the terms of the transaction, Graphic Packaging will pay approximately £71 million in cash and assume approximately £10 million in other net liabilities in an all cash transaction to be funded with existing cash and debt under the Company's current revolving line of credit. Contego Cartons operates three folding carton facilities that convert approximately 150,000 tons of paperboard annually into folding cartons for the food and consumer product industries. Two of Contego Carton's facilities are located in the United Kingdom while the third facility is in the Netherlands. The acquisition is subject to standard closing requirements and is expected to close in late December.
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