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 proposed transaction between International Paper and Graphic Packaging. Replays of the call will be available for one week following the completion of the call and can be accessed by dialing 85. Supporting materials for our conference call have also been posted to the Company's website. For those calling from within North America, dial 80 at least 10 minutes prior to the start of the conference call (Conference ID # 61299881). To access the conference call, please go to the Investor Relations section of the Graphic Packaging website: and click the audio webcast link. The Company will host a conference call at 8:30 am eastern time today ( October 24, 2017) to discuss the combination. Graphic Packaging's financial adviser was BofA Merrill Lynch and Alston & Bird LLP acted as legal counsel. The transaction is subject to standard closing requirements and regulatory review and is expected to close in early 2018. The transaction has been approved by the Board of Directors of both companies. "The $75 million in synergies is compelling and will be driven by cost reductions, increased paperboard integration, and procurement and mill efficiencies." "We expect the transaction will significantly increase our mill production and converting scale, meaningfully increase our exposure to the growing foodservice market, provide significant runway to realize synergies, and drive strong financial results." "We are excited about the platform for future growth created by this combination," said President and CEO Michael Doss. The business is projected to generate Adjusted EBITDA of $210 million in 2017. and one in the U.K., with the capacity to convert 250,000 tons of SBS paperboard into over 24 billion units of paper-based cups and cylindrical containers. The business includes two SBS mills located in Augusta, Georgia and Texarkana, Texas with annual production capacity of 1.2 million tons of SBS, three converting facilities in the U.S. International Paper's North America Consumer Packaging business is a $1.6 billion revenue leading producer of solid bleached sulfate (SBS) paperboard and paper-based foodservice products globally. International Paper will have a 2-year lock-up on the monetization of their partnership interest and cannot purchase GPK shares for a period of 5 years, subject to limited exceptions. The transaction will be completed at a compelling EV/Adjusted EBITDA multiple of 8.6x, pre-synergies, and 6.3x, post-synergies. There will be no change to Graphic Packaging's current Board of Directors or leadership team. The partnership will assume $660 million of International Paper debt. International Paper will own 20.5 percent of the partnership, equivalent to a $1.14 billion value. Graphic Packaging Holding Company will own 79.5 percent of the partnership and will be the sole operator. Graphic Packaging Holding Company (NYSE: GPK) will create a $6 billion paper-based packaging company by forming a new partnership comprised of Graphic Packaging's existing businesses and International Paper's (NYSE: IP) North America Consumer Packaging business. No change to Graphic Packaging's current Board of Directors or leadership team.International Paper will own 20.5 percent of the partnership Transaction structured as a new partnership comprised of Graphic Packaging's existing businesses and International Paper Company's North America Consumer Packaging business.Projected to be accretive to earnings in year one.Valuation of 8.6x Adjusted EBITDA and 6.3x Adjusted EBITDA post-synergies based on $210 million of Adjusted 2017 Estimated EBITDA.Targeting $75 million in synergies by the end of year three.International Paper Company's North America Consumer Packaging business valued at $1.8 billion.Expands existing and builds new platforms for integrated growth in SBS foodservice markets and folding carton converting.Graphic Packaging will create a leading integrated paper-based packaging company with approximately $6 billion of revenue and $1 billion of EBITDA post-synergies.
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