Graham Packaging Company Inc., headquartered in York, Pa., has announced that its subsidiary, Graham Packaging Acquisition Corp., has signed a purchase agreement to acquire Liquid Container, L.P. and its subsidiaries for total purchase consideration of US$568 million, subject to certain adjustments.
Liquid Container operates fourteen blow molded plastic container plants in the U.S. serving food and household product categories. Liquid Container is expected to have net sales in N.A. of almost US$400 million and EBITDA (earnings before interest, taxes, depreciation and amortization) of approximately US$72 million in 2010. Approximately 80 per cent of Liquid Container’s unit sales are supplied to customers in the food category.
"Liquid Container takes our technology capability, customer base, and domestic footprint to the next level," states Mark Burgess, chief executive officer of Graham. "Liquid Container’s business model has been similar to Graham’s in its use of technology to service categories in the market that require value added products. Liquid Container has built solid long standing relationships with customers that are complementary to ours with very little overlap. In addition to its high quality presence in the food business, Liquid Container brings technology and know-how to Graham that we believe can be applied across our existing multinational footprint. This is one of the few scale businesses that meet our acquisition criteria and we are excited about the new growth opportunities that Liquid Container offers Graham."
In addition to the customer and technology benefits, Graham believes the transaction will be accretive on an EBITDA, EPS (earnings per share), and free cash flow basis in its first full year of operation.
Graham expects to fund the acquisition with 100 per cent debt and has arranged committed financing. The transaction is subject to normal regulatory approvals and customary closing conditions, and is expected to close in 2010.
Graham Packaging is a worldwide leader in the design, manufacture and sale of technology-based, customized blow molded plastic containers for the branded food and beverage, household, personal care/specialty and automotive lubricants product categories. Graham Packaging has an extensive blue-chip customer base that includes many of the world’s largest branded consumer products companies. It produces more than 20 billion container units annually at 83 plants in N.A., Europe, South America, and China.
Graham Packaging is a leading U.S. supplier of plastic containers for hot-fill juice and juice drinks, sports drinks, drinkable yogurt and smoothies, nutritional supplements, wide-mouth food, dressings, condiments and beers; the leading global supplier of plastic containers for yogurt drinks; a leading supplier of plastic containers for liquid fabric care products, dish care products and hard-surface cleaners; and the leading supplier in the U.S., Canada and Brazil of one-quart/liter plastic motor oil containers.
To learn more about Graham Packaging, please visit its Web-site at www.grahampackaging.com.