Graphic Packaging acquires Contego’s European food carton business
Graphic Packaging Holding Company, a leading provider of packaging solutions to food, beverage and other consumer products companies, today announced an agreement to acquire Contego Cartons, a leading food and consumer product packaging company based in the UK.
“We are excited about the acquisition of Contego’s food and consumer carton business as it extends Graphic Packaging into new end markets, expands the company’s global footprint and provides new opportunities for growth,” comments David Scheible, Graphic Packaging’s president and CEO. “Contego operates throughout Western Europe with state of the art facilities in the UK and the Netherlands. Combining Graphic’s current European business focused in the beverage markets with Contego’s strong market share position in the European food and consumer products markets will allow us to broaden our customer base and enhance our competitive positioning. Similar to our strategy in the US, we are committed to growing our European business around food and beverage markets and optimising our supply chain footprint around our customers’ needs. There are solid synergies in this combination and we believe the Contego Cartons acquisition is an important step in strengthening our competitive positioning in Europe.”
Under the terms of the transaction Graphic Packaging will pay approximately £71 million in cash and assume approximately £10 million in other net liabilities in an all cash transaction to be funded with existing cash and debt under the company’s current revolving line of credit.
Contego Cartons operates three folding carton facilities that convert approximately 150,000 tons of paperboard annually into folding cartons for the food and consumer product industries. The acquisition is subject to standard closing requirements and is expected to close in late December.