Graphic Packaging Holding Company announced that its subsidiary, Graphic Packaging International, LLC, has reached an agreement to acquire substantially all the assets of the foodservice business of Letica Corporation, a subsidiary of RPC Group PLC, for $95 million, subject to standard closing conditions and regulatory review. The transaction is expected to close in the 3Q 2018, as the company says in the press release received by Lesprom Network.
Synergies from the acquisition will be driven by the integration of additional SBS paperboard tons, lower logistics costs, and other cost efficiencies. On a post-synergy basis, the EV/EBITDA multiple for this transaction is expected to be approximately 6.0X.
President and CEO Michael Doss said: "The transaction will further diversify our customer base, enhance our geographic footprint, and provide needed capacity to meet the incremental demand for paper cups resulting from the ongoing shift out of polystyrene foam. The transaction is consistent with the strategy we outlined after the combination with the SBS mill and foodservice assets that closed on January 1, 2018, specifically, our intent to grow our foodservice business organically and through acquisitions and drive higher integration levels for our SBS mills."
Letica Foodservice is focused on the production of paperboard-based cold and hot cups and cartons for the growing foodservice market in North America.
