DELAWARE, Ohio, Feb. 11,
2019 /PRNewswire/ -- Greif, Inc. (NYSE: GEF, GEF.B), a
global leader in industrial packaging products and services,
announced today that it has completed its previously announced
acquisition of Caraustar Industries, Inc.
"I am pleased that we have completed the acquisition of
Caraustar Industries and I welcome our new colleagues to the Greif
team," said Pete Watson, Greif's
President and Chief Executive Officer. "The addition of Caraustar
bolsters our leadership position and enhances our existing
portfolio of packaging solutions. We look forward to delivering on
the opportunities that the addition of Caraustar provides for our
team, our customers and our shareholders."
Greif estimates that it will be able to achieve at least
$45 million in cost synergies and
performance improvements within the next 36 months through the
integration of the former Caraustar operations into Greif's
existing business. Greif also anticipates that the acquisition will
enhance Greif's existing margins; be immediately accretive to
earnings and free cash flow; and strengthen and balance Greif's
existing portfolio. Greif believes that integration risk is low
given Caraustar's operational adjacency to Greif and the strong
cultural fit between the companies.
Caraustar's financial results will be reported within Greif's
Paper Packaging and Services segment going forward. Greif's Fiscal
2019 guidance will be updated for the inclusion of Caraustar in
conjunction with the release of the company's first quarter fiscal
2019 results.
Greif financed the $1,800.0
million all-cash acquisition from the proceeds of the
issuance of $500.0 million of new
senior unsecured notes and from refinancing its secured credit
facilities and new term loans in the principal amount of
$1,675.0 million. As part of the
transaction, Greif will to redeem its $250.0
million of 7.75 percent senior unsecured notes due
August 2019. As a result of the new
financing, Greif's overall weighted cash interest rate fell to
approximately 4.90 percent.
About Greif
Greif is a global leader in industrial packaging products and
services and is pursuing its vision: in industrial packaging, be
the best performing customer service company in the world. The
company produces steel, plastic and fibre drums, intermediate bulk
containers, reconditioned containers, flexible products,
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. Greif also manages timber properties in the
southeastern United States. The
company is strategically positioned in over 40 countries to serve
global as well as regional customers. Additional information is on
the company's website at www.greif.com.
About Caraustar
Caraustar Industries, Inc. is a leader in the manufacturing of
high-quality recycled materials and paper products. The company is
committed to environmentally sound practices and is dedicated to
providing customers with outstanding value through innovative
products and services. Caraustar's four business lines
include Recycling Services, Mill Group (coated and uncoated
paperboard and specialty paperboard products), Industrial Products
Group (tubes and cores, construction products, protective
packaging, adhesives) and Consumer Packaging (folding cartons,
set-up boxes, packaging services). Caraustar serves four principal
recycled boxboard product end-use segments: tubes and cores;
folding cartons; gypsum facing paper; and specialty paperboard
products.
Cautions Concerning Forward-Looking Statements
This communication may contain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
with respect to Greif's acquisition of Caraustar Industries, Inc.
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 impact of indebtedness incurred by Greif in
connection with the transaction and the potential impact on the
rating of indebtedness of Greif; the ability to retain Caraustar's
businesses and its 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 February 11,
2019. Except to the extent required by applicable law, Greif
undertakes no obligation to update or revise any forward-looking
statement.
For more information, please contact:
Investors: Matt Eichmann, Vice
President, Investor Relations & Corporate Communications,
740-549-6067
Media: Debbie Crow, Director,
Corporate Communications, 740-657-6992
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SOURCE Greif, Inc.