USA – Graphic Packaging has reached an agreement with Clearwater Paper to divest its bleached paperboard manufacturing facility in Augusta, valued at approximately US$700 million.
This valuation reflects adjusted earnings before interest, taxes, depreciation, and amortization of around US$100 million.
Graphic’s President and CEO, Michael Doss, commented, “Augusta is an outstanding asset with a great team, which we concluded is a more compelling fit with Clearwater Paper’s strategic growth plans than our own.”
He added, “Bleached paperboard plays a major role in sustainable consumer packaging, and we will continue to service growing foodservice and packaging demand with bleached paperboard from our Texarkana facility.”
The transaction is pending regulatory approvals and is expected to conclude in the second quarter of this year.
TD Securities acted as the financial advisor for Clearwater Paper, with Pillsbury Winthrop Shaw Pittman serving as the lead transaction counsel. Graphic received advisory support from BofA Securities and Alston & Bird during the transaction.
Clearwater Paper CEO Arsen Kitch expressed enthusiasm about the acquisition, stating, “Augusta is a great fit with our strategy and improves our position as a premier, independent paperboard supplier to North American converters.”
In other news, Graphic Packaging reported net income of US$196 million in the fourth quarter of 2023, compared to US$156 million in Q4 of 2022.
Adjusted for special charges and amortization of purchased intangibles, Adjusted Net Income for Q4 2023 was US$230 million, or US$0.75 per diluted share, compared to US$181 million, or US$0.59 per diluted share, in the same period of 2022.
For the full year 2023, Graphic Packaging reported net income of US$723 million, or US$2.34 per share, compared to US$522 million, or US$1.69 per share, in 2022.
Adjusted net income for the full year 2023 was US$899 million, or US$2.91 per diluted share, compared to US$722 million, or US$2.33 per diluted share, in 2022.
Both years were impacted by special charges, detailed in the attached Reconciliation of Non-GAAP Financial Measures table.
Michael Doss, the Company’s President and CEO said, “While 2023 was a year of transition for consumer packaging, it was one of outstanding execution for Graphic Packaging.
“We significantly expanded profitability, achieved strong earnings growth and delivered innovative sustainable packaging solutions that consumers prefer.
“Our disciplined approach and commitment to delivering results for customers was on full display during a year of well-chronicled inventory normalization for both retailers and consumer packaged goods companies.”
For all the latest packaging and printing industry news from Africa and the World, subscribe to our NEWSLETTER, follow us on LinkedIn and subscribe to our YouTube channel.
