Graphic Packaging Holding Company Announces Second $250 Million Acquisition of International Paper's Minority Partnership Interest

Rhea-AI Summary

Graphic Packaging (NYSE: GPK) has confirmed its plan to acquire an additional 17.4 million partnership units from International Paper for $250 million. This transaction will increase Graphic Packaging's ownership interest in Graphic Packaging International Partners, LLC from 81.1% to 85.5%. The acquisition will be financed through cash reserves and a draw on the company’s revolving credit facility. The announcement highlights the company's strategy to strengthen its position in the market.

Positive

• Increase in ownership interest from 81.1% to 85.5%.
• Strengthens market position and control over the Partnership.

Negative

• Utilization of credit facility may increase financial leverage.
• Dependence on cash reserves for funding could limit future liquidity.

ATLANTA, Aug. 10, 2020 /PRNewswire/ -- Graphic Packaging Holding Company (NYSE: GPK), (the "Company" or "Graphic Packaging"), announced today that International Paper has notified the Company of its intent to continue the monetization process of its ownership interest in Graphic Packaging International Partners, LLC (the "Partnership"). Per the agreement, the Partnership will purchase approximately 17.4 million partnership units from International Paper for $250 million. As a result, Graphic Packaging's ownership interest in the Partnership will increase from approximately 81.1% to 85.5%. The purchase will be funded with cash on hand and a draw on the domestic revolving credit facility.

Forward Looking Statements
Any statements of the Company's expectations around the monetization process and projected ownership interests in this press release constitute "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Such statements are based on currently available information and are subject to various risks and uncertainties that could cause actual results to differ materially from the Company's present expectations. Undue reliance should not be placed on such forward-looking statements, as such statements speak only as of the date on which they are made and the Company undertakes no obligation to update such statements, except as required by law. Additional information regarding these and other risks is contained in the Company's periodic filings with the SEC.

About Graphic Packaging Holding Company
Graphic Packaging Holding Company (NYSE: GPK), headquartered in Atlanta, Georgia, is committed to providing consumer packaging that makes a world of difference. The Company is a leading provider of paper-based packaging solutions for a wide variety of products to food, beverage, foodservice, and other consumer products companies. The Company operates on a global basis, is one of the largest producers of folding cartons and paper-based foodservice products in the United States, and holds leading market positions in coated recycled paperboard, coated unbleached kraft paperboard and solid bleached sulfate paperboard. The Company's customers include many of the world's most widely-recognized companies and brands. Additional information about Graphic Packaging, its business and its products is available on the Company's web site at www.graphicpkg.com.

 

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SOURCE Graphic Packaging Holding Company

FAQ

What is the acquisition deal between Graphic Packaging and International Paper?

Graphic Packaging is acquiring 17.4 million partnership units from International Paper for $250 million.

How will the acquisition impact Graphic Packaging's ownership structure?

The acquisition will increase Graphic Packaging's ownership interest in the Partnership from 81.1% to 85.5%.

How will Graphic Packaging finance the acquisition?

The deal will be funded with cash on hand and a draw on the domestic revolving credit facility.

What is the strategic importance of this acquisition for Graphic Packaging?

This acquisition strengthens Graphic Packaging's market position and increases its control over the Partnership.