ATLANTA,
Jan. 2, 2018 /PRNewswire/ --
Highlights
- Creates a leading integrated paper-based packaging company with
approximately $6 billion of projected
revenue and approximately $1 billion
of projected EBITDA post-synergies
- Expands existing and builds new platforms for integrated growth
in SBS foodservice markets and folding carton converting
- Targeting $75 million in
synergies by the end of year three
- Projected to be accretive to earnings in year one
- No change to Graphic Packaging's current Board of Directors or
leadership team
Graphic Packaging Holding Company (NYSE: GPK) has completed the
combination of Graphic Packaging's existing businesses with
International Paper's (NYSE: IP) North America Consumer Packaging
business. Graphic Packaging owns 79.5 percent of the combined
company and will be the sole manager. International Paper will own
20.5 percent of the combined company. Graphic Packaging has assumed
$660 million of International Paper
debt and concurrently has amended and restated its senior secured
credit agreement.
There is no change to Graphic Packaging's current Board of
Directors or leadership team. International Paper has a 2-year
lock-up on the monetization of their ownership interest and cannot
purchase GPK shares for a period of 5 years, subject to limited
exceptions.
On a combined basis, Graphic Packaging is now a leading
integrated paper-based packaging company with approximately
$6 billion of projected revenue and
approximately $1 billion of projected
EBITDA post-synergies. Graphic Packaging is one of the largest
producers of folding cartons and paper-based foodservice products
in the United States, has
strategic folding carton and foodservice converting positions
globally, and holds leading market positions in solid bleached
sulfate paperboard, coated unbleached kraft paperboard and
coated-recycled paperboard.
"We are excited to close this transformative transaction at the
start of the new year, and the timing reflects the significant
effort of both Graphic Packaging and International Paper
employees," said President and CEO Michael
Doss. "We are very enthusiastic about the platform for
future growth created by this combination and expect the
transaction will significantly increase our mill production and
converting scale. The combination meaningfully increases our
exposure to the growing foodservice market, provides significant
runway to realize synergies, and will drive strong financial
results."
"The $75 million in synergies is
compelling and will be driven by cost reductions, increased
paperboard integration, and procurement and mill efficiencies."
"We welcome the talented employees of International Paper into
Graphic Packaging, and look forward to delivering significant value
from this transaction to our customers, employees, and shareholders
in 2018 and beyond."
Forward Looking Statements
This communication contains "forward-looking" statements as that
term is defined in Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended by the Private Securities Litigation Reform Act of 1995,
including statements regarding the effect of the transaction
between International Paper and Graphic Packaging. All statements,
other than historical facts, including the expected benefits of the
transaction such as improved operations, enhanced revenues,
earnings and cash flow, cost reductions, increased paperboard
integration, synergies, growth potential, market profile, financial
profile and accretion to shareholder value; the competitive ability
and position of the combined company following completion of the
proposed transaction; foodservice and folding carton converting
market conditions; and any assumptions underlying any of the
foregoing, are forward-looking statements. Forward-looking
statements are based upon current plans, estimates and expectations
that are subject to risks, uncertainties and assumptions. Should
one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary
materially from those indicated or anticipated by such
forward-looking statements. The inclusion of such statements should
not be regarded as a representation that such plans, estimates or
expectations will be achieved. Important factors that could cause
actual results to differ materially from such plans, estimates or
expectations include, among others, (1) unexpected costs, charges
or expenses resulting from the proposed transaction; (2)
uncertainty of the expected financial performance of the combined
company following completion of the proposed transaction; (3)
failure to realize the anticipated benefits of the proposed
transaction, including as a result of delay in integrating the
businesses; (4) the ability of the combined company to implement
its business strategy; (5) difficulties and delays in achieving
revenue and cost synergies of the combined company; (6) inability
to retain and hire key personnel; (7) the risk that stockholder
litigation in connection with the proposed transaction or other
settlements or investigations may result in significant costs of
defense, indemnification and liability; and (8) other risk factors
as detailed from time to time in Graphic Packaging's reports filed
with the SEC, including Graphic Packaging's Annual Report on Form
10-K for the fiscal year ended December 31,
2016, periodic quarterly reports on Form 10-Q, periodic
current reports on Form 8-K and other documents filed with the SEC.
The foregoing list of important factors is not exclusive. 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 Graphic Packaging undertakes no obligation to update such
statements, except as may be required by law.
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 product 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.
View original
content:http://www.prnewswire.com/news-releases/graphic-packaging-completes-combination-with-international-papers-north-america-consumer-packaging-business-300576212.html
SOURCE Graphic Packaging Holding Company