Graham Packaging Company Inc. (NYSE: GRM) today announced that its subsidiary, Graham Packaging Acquisition Corp., has signed a purchase agreement to acquire Liquid Container, L.P. and its subsidiaries for total purchase consideration of $568 million, subject to certain adjustments.
Liquid Container operates fourteen blow molded plastic container plants in the U.S. serving food and household product categories. Liquid Container is expected to have net sales in North America of almost $400 million and EBITDA of approximately $72 million in 2010. Approximately 80% of Liquid Container's unit sales are supplied to customers in the food category.
Liquid Container takes our technology capability, customer base, and domestic footprint to the next level, said Mark Burgess, CEO of Graham. Liquid Container's business model has been similar to Graham's in its use of technology to service categories in the market that require value added products. Liquid Container has built solid long standing relationships with customers that are complementary to ours with very little overlap.
In addition to its high quality presence in the food business, Liquid Container brings technology and know-how to Graham that we believe can be applied across our existing multinational footprint. This is one of the few scale businesses that meet our acquisition criteria and we are excited about the new growth opportunities that Liquid Container offers Graham. In addition to the customer and technology benefits, Graham believes the transaction will be accretive on an EBITDA, EPS, and free cash flow basis in its first full year of operation.
Graham expects to fund the acquisition with 100% debt and has arranged committed financing. The transaction is subject to normal regulatory approvals and customary closing conditions, and is expected to close in 2010.
| David Bullock Chief Financial Officer +1 (717) 849-8500 | Ian Lee +1 (717) 771-3220 InvestorRelations@grahampackaging.com |
