Blowmolding: Graham buys Liquid Container

Plastics packaging major Graham Packaging (today, Aug. 9) announced it would acquire Liquid Container LP and its subsidiaries for $568 million, subject to certain adjustments. With the buy, Graham (York, PA) adds 14 blowmolding facilities in the U.S. to its portfolio, with those serving customers in the food and household markets. The processor, headquartered in West Chicago, IL, processes PP, PET, and HDPE. Selling Liquid Container are its principal shareholders, Mid Oaks Investments and Gallagher Industries.

The acquisition officially is being handled through a Graham subsidiary, Graham Packaging Acquisition Corp. 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 the company's unit sales are to food processors. Graham early this year undertook an initial public offering (IPO) and, in its quarterly financial report last week, announced the company expects adjusted EBITDA to be $478 million for FY10.

Although the two companies have been direct competitors for many years, offering similar technologies, they share few customers, according to Mark Burgess, CEO of Graham. "Liquid Container has built solid long-standing relationships with customers that are complementary to ours with very little overlap...This is one of the few scale businesses that meet our acquisition criteria."

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. Graham earlier this year acquired China Roots Packaging PTE Ltd., a plastics processor based in Guangzhou, China, marking Graham's entry into that country. Graham already has more than 80 processing facilities across the Americas and Europe. —mpweditorial@cancom.com