ATLANTA, Aug. 28, 2018 /PRNewswire/ -- Graphic Packaging
Holding Company (NYSE: GPK), today announced that its subsidiary,
Graphic Packaging International, LLC, has reached an agreement to
acquire substantially all the assets of the foodservice business of
Letica Corporation, a subsidiary of RPC Group PLC (LSE: RPC), for
$95 million, subject to standard
closing conditions and regulatory review. The transaction is
expected to close in the third quarter of 2018.
Letica Foodservice is focused on the production of
paperboard-based cold and hot cups and cartons for the growing
foodservice market in North
America. The company operates two world class foodservice
converting facilities in Clarksville,
Tennessee and Pittston,
Pennsylvania.
The business generated $110
million in revenue and converted approximately 40 thousand
tons of solid bleached sulfate ("SBS") paperboard in the twelve
months ended 6/30/2018. Synergies from the acquisition will be
driven by the integration of additional SBS paperboard tons, lower
logistics costs, and other cost efficiencies. On a post-synergy
basis, the EV/EBITDA multiple for this transaction is expected to
be approximately 6.0X.
"We are excited to announce the acquisition of the Letica
Foodservice assets as it extends our leading position in the
growing paperboard-based foodservice market in North America," said President and CEO
Michael Doss. "The transaction will
further diversify our customer base, enhance our geographic
footprint, and provide needed capacity to meet the incremental
demand for paper cups resulting from the ongoing shift out of
polystyrene foam. The transaction is consistent with the strategy
we outlined after the combination with the SBS mill and foodservice
assets that closed on January 1,
2018, specifically, our intent to grow our foodservice
business organically and through acquisitions and drive higher
integration levels for our SBS mills."
Forward Looking Statements
Any statements of the Company's expectations in this press
release constitute "forward-looking statements" as defined in the
Private Securities Litigation Reform Act of 1995. Such statements,
including but not limited to those regarding the effect of the
acquisition on the Company's integration levels and financial
position, are based on currently available information and are
subject to various risks and uncertainties that could cause actual
results to differ materially from the Company's present
expectations. These risks and uncertainties include, but are
not limited to, the Company's ability to successfully integrate the
acquisition and achieve synergies. Undue reliance should not
be placed on such forward-looking statements, as such statements
speak only as of the date on which they are made, and the Company
undertakes no obligation to update such statements except as
required by law. Additional information regarding these and
other risks is contained in the Company's periodic filings with the
SEC.
About Graphic Packaging Holding Company
Graphic Packaging Holding Company (NYSE: GPK), headquartered in
Atlanta, Georgia, is committed to
providing consumer packaging that makes a world of difference. The
Company is a leading provider of paper-based packaging solutions
for a wide variety of products to food, beverage, foodservice, and
other consumer products companies. The Company operates on a global
basis, is one of the largest producers of folding cartons and
paper-based foodservice products in the
United States and holds leading market positions in solid
bleached sulfate paperboard, coated unbleached kraft paperboard and
coated recycled paperboard. The Company's customers include many of
the world's most widely-recognized companies and brands. Additional
information about Graphic Packaging, its business and its products
is available on the Company's web site at www.graphicpkg.com.
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SOURCE Graphic Packaging Holding Company