The seven converting facilities are involved in the production of folding cartons for consumer packaged goods businesses
Graphic Packaging purchased Greif’s seven converting facilities. (Credit: Pete Linforth from Pixabay)
Graphic Packaging, via its US operating firm Graphic Packaging International, has closed the acquisition of Consumer Packaging Group (CPG) business from Greif, an industrial packaging products and services provider, for around $85m.
As per the terms of the deal signed earlier, Graphic Packaging has purchased Greif’s seven converting facilities located across the US facilities.
The seven converting facilities, which are said to generate more than $200m in annual revenue, are involved in the production of folding cartons for consumer packaged goods businesses.
Greif president and CEO Pete Watson said: “Given our industrial focus, we were not the rightful owner of the CPG business.
“The sale helps us de-lever our balance sheet, optimize our capital allocation plans and refocuses our business on our core industrial franchise and strategic growth priorities in Intermediate Bulk Container production and reconditioning and containerboard integration.”
Sale proceeds to be used for debt repayment
Greif plans to use the proceeds from the sale of CPG for debt repayment. The firm expects the sale to have no material impact on its Fiscal 2020 outlook or Fiscal 2022 financial commitments.
On the transaction, Goldman Sachs acted as exclusive financial advisor to Greif while Allen & Overy acted as exclusive legal advisor.
Earlier this year, Graphic Packaging International agreed to acquire Omaha packaging plant from Quad/Graphics for around $40m.
The sale is a part of Quad’s efforts to concentrate more on higher-value packaging solutions.
Graphic Packaging provides paper-based packaging solutions for different products while Greif offers industrial packaging products and services.