US-based Graphic Packaging Holding Company is to acquire Contego’s European food carton business from its current owner, mergers & acquisitions group Platinum Equity.
Graphic – a leading provider of packaging solutions to food, beverage and other consumer products companies – will 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.
Contego Cartons, a leading UK-based food and consumer product packaging company, operates three folding carton facilities – two in the UK and one in the Netherlands – that convert about 150,000 tons of paperboard annually into folding cartons for the food and consumer product industries.
Graphic expects to generate US$8-$10 million of synergies over the two years following the acquisition.
“The acquisition of Contego’s Food and Consumer Carton business extends Graphic Packaging into new end markets, expands the Company’s global footprint and provides new opportunities for growth,” says Graphic Packaging president and CEO David Scheible.
“Contego operates throughout Western Europe. 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.”
Scheible adds that the acquisition is an important step in strengthening Graphic’s competitive positioning in Europe.
“Similar to our strategy in the US, we are committed to growing our European business around food and beverage markets and optimising our supply chain footprint around our customers’ needs,” he says.
Expected to close in late December, the acquisition is subject to standard closing requirements.
Based in Marietta, Georgia, Graphic Packaging is one of the largest producers of folding cartons in the US and holds a leading market position in coated-unbleached kraft, coated-recycled boxboard multi-wall bag and specialty packaging.
