Acquisition establishes a strong foothold in
jerrycans in NA
DELAWARE, Ohio, Nov. 9, 2022
/PRNewswire/ -- Greif, Inc. (NYSE: GEF, GEF.B), a global
leader in industrial packaging products and services, today
announced it has entered into a definitive agreement to acquire Lee
Container Corporation, Inc. ("Lee Container" or "Lee"), an
industry-leading manufacturer of high-performance barrier and
conventional blow molded containers, for a purchase price of
$300 million before taking into
consideration tax benefits with an estimated net present value of
approximately $30 million. The
all-cash transaction will be funded through Greif's existing credit
facility and is expected to close by the end of the calendar year,
subject to customary closing conditions, including regulatory
clearances.
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Lee Container is a leader in the North American blow molded
jerrycan industry, primarily serving growth-oriented customers in
the agrochemical, other specialty chemical, oil & lubricant and
pet care segments. Lee Container operates three strategically
positioned manufacturing facilities in Homerville, GA, Centerville, IA and Nacogdoches, TX, with over 500 employees
throughout the U.S. For the trailing twelve months ended
September 30, 2022, Lee generated
sales of $162 million and adjusted
EBITDA of $33 million. Additionally,
as part of the acquisition Greif expects to realize approximately
$6 million in synergies within the
first two years of ownership.
"The acquisition of Lee Container is a critical step in our
continued Build to Last journey", said Ole
Rosgaard, President and Chief Executive Officer of Greif.
"Lee is an exceptional strategic and cultural fit, with exceptional
people and values as well as a favorable mix of product and end
market exposures. The Lee acquisition solidifies our commitment to
growing our jerrycan and small plastic bottle footprint and adds a
further growth engine to our GIP business. I am excited to welcome
our new colleagues to the Greif family and look forward to growing
our business together with them."
"The Lee Container family is excited for today's announcement
and the opportunities it presents for our colleagues, customers and
suppliers", added Robert Varnedoe,
Chief Executive Officer of Lee Container. "Greif brings additional
industry expertise, scale, and customer service focus that will be
formative in continuing the strong growth fundamentals of the
company. Our customers and suppliers will benefit from the enhanced
product offering of Greif, and I'm most excited that our colleagues
will join a thriving, people-first culture at Greif."
The acquisition represents numerous key strategic benefits,
including:
- Offers immediate scale in jerrycans and small plastic bottles
in North America, with a platform
for future growth through both organic and inorganic reinvestment
opportunities
- Provides favorable exposure to growing agricultural and
specialty chemicals end markets, which offers portfolio
diversification benefits to Greif's GIP business mix
- Margin accretive transaction pre-synergies, with multiple
levers for value creation and incremental synergy capture under
Greif ownership
- Attractive return profile given strong strategic fit, upside
optionality for growth, and strong cultural alignment with
Greif
Greif is excited to provide further information on the Lee
Container acquisition and its expected impact to go-forward
business operations as part of our fiscal fourth quarter review and
2023 guidance outlook discussion, which will occur during our
earnings conference call on December 8,
2022.
Advisors
Stifel is acting as exclusive financial advisor to
Greif for the transaction, and Baird is acting as financial advisor to Lee
Container.
About Greif, Inc.
Greif is a global leader in industrial packaging products and
services and is pursuing its vision: be the best performing
customer service company in the world. The Company produces steel,
plastic and fibre drums, intermediate bulk containers,
reconditioned containers, containerboard, uncoated recycled
paperboard, coated recycled paperboard, tubes and cores and a
diverse mix of specialty products. The Company also manufactures
packaging accessories and provides filling, packaging and other
services for a wide range of industries. In addition, Greif manages
timber properties in the southeastern United States. The Company is strategically
positioned in over 35 countries to serve global as well as regional
customers. Additional information is on the Company's website
at www.greif.com.
About Lee Container Corporation,
Inc.
Lee Container Corporation, Inc. is a leading manufacturer of
high-performance barrier and conventional blow molded containers,
primarily serving growth-oriented customers in the agricultural,
other specialty chemical, oil & lubricant and pet care segments
in North America. Lee operates
three well-invested, strategically located manufacturing facilities
in the United States with flexible
capabilities designed to cost-effectively produce both custom and
stock containers in a wide variety of sizes and quantities. The
company is headquartered in Homerville,
GA and currently employs over 500 employees throughout
North America.
Concerning Forward-Looking
Statements
This release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995
with respect to Greif's plans to acquire Lee Container and other
statements about future expectations, prospects, estimates and
other matters that are dependent upon future events or
developments. These forward-looking statements may be identified by
words such as "expect," "anticipate," "intend," "plan," "believe,"
"will," "should," "could," "would," "project," "continue,"
"likely," and similar expressions, and include statements
reflecting future results, trends or guidance and statements of
outlook. All forward-looking statements are based on assumptions,
expectations and other information currently available to
management. All forward-looking statements are subject to certain
risks and uncertainties that could cause actual results to differ
materially from those forecasted, projected or anticipated, whether
expressed or implied. These risks and uncertainties include:
the ability to successfully complete the acquisition of Lee
Container on a timely basis, including receipt of required
regulatory approvals; the occurrence of any event, change or other
circumstance that could give rise to the termination of the
definitive agreement; the outcome of any legal proceedings that may
be instituted against the parties and others related to the
acquisition of Lee Container; the satisfaction of certain
conditions to the completion of the acquisition of Lee Container;
if the acquisition of Lee Container is completed, the ability to
retain the acquired businesses' customers and employees, the
ability to successfully integrate the acquired businesses into
Greif's operations, and the ability to achieve the expected
synergies as well as accretion in margins, earnings or cash flow;
competitive pressures in Greif's various lines of business; the
risk of non-renewal or a default under one or more key customer or
supplier arrangements or changes to the terms of or level of
purchases under those arrangements; uncertainties with respect to
U.S. tax or trade laws; the effects of any investigation or action
by any regulatory authority; and changes in foreign currency rates
and the cost of commodities. Greif is subject to additional
risks and uncertainties described in its Form 10-K, Form 10-Q and
Form 8-K reports and exhibits to those reports. This release
reflects management's views as of November
9, 2022. Except to the extent required by applicable law,
Greif undertakes no obligation to update or revise any
forward-looking statement.
Investor Relations contact
information
Matt Leahy, Vice President,
Corporate Development & Investor Relations,
740-549-6158. Matthew.Leahy@Greif.com
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SOURCE Greif, Inc.