USA – American manufacturing company, Greif has increased its stake in Centurion Container LLC in an all-cash transaction valued at US$145 million.
The deal pending customary closing adjustments will increase Greif’s ownership in the company from 9% to 80%.
Centurion, one of the leaders in intermediate bulk container (IBC) and plastic drum reconditioning in North America, operates a network of eight reconditioning facilities across the US.
Earlier in April 2020, Greif acquired a minority stake in the company to expand its operation in North America.
With the increased ownership, Greif’s presence will expand in the North American region, the press release said. The current deal was funded through Grief’s existing credit facility.
Greif president and chief executive officer Ole Rosgaard said: “The Centurion joint venture has seen rapid growth since our initial investment in 2020.
“We are excited to take a majority stake in this business as it aligns with our strategy, is immediately margin-accretive and directly supports our third Build to Last mission of Protecting our Future through investments in the circular economy.”
Following the acquisition, Centurion will report its financial results within the Greif Global Industrial Packaging segment.
Furthermore, the deal will expand the company’s reusable and sustainable packaging solutions offering.
Centurion president and CEO Michael Chorpash added: “Greif has been a tremendous partner these past three years, and we are excited to continue to grow Centurion with them. Our two companies align well with our shared commitments to advance a circular economy and reduce greenhouse gas emissions.”
Grief has been gaining from its recent acquisitions. In 2022, the company completed the acquisition of Lee Container Corporation, Inc. for US$300 million.
Lee Container is a leading manufacturer of high-performance barrier and conventional blow-molded containers.
The buyout is expected to be immediately accretive to GEF’s margins, cash flow and earnings. The acquisition will provide Greif with immediate scale in jerry cans and small plastic bottles in North America.
However, the company has been bearing the brunt of declining demand across its product lines.
The Global Industrial Packaging segment and Paper Packaging segment are facing lower volumes due to weak consumer spending in the United States, energy inflation in EMEA and Covid-led shutdowns in China.
GEF delivered adjusted earnings per share of US$1.06 for the first-quarter fiscal 2023. The bottom line decreased 17% year over year due to lower volume and selling prices.
Sales were down 19% year over year to US$1.27 billion due to the lower volume of primary products sold, selling prices, product mix and the impact of changes in foreign currencies against the U.S. Dollar.
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