US – American manufacturing company, Greif has agreed to acquire the manufacturer of jerrycans and other barrier and conventional blow-molded containers, Lee Container for US$300 million.
The purchase price is before taking into consideration tax benefits with an estimated net present value of approximately US$30 million, Greif said in a news release.
The acquisition will increase Greif’s jerrycans and small plastic bottle capacity in North America while also offering exposure in the agricultural and speciality chemicals end markets.
In the first two years of the acquisition, Greif expects to achieve approximately US$6 million in synergies from the deal.
Greif President and Chief Executive Officer Ole Rosgaard said: “The acquisition of Lee Container is a critical step in our continued Build to Last journey.
“Lee is an exceptionally strategic and cultural fit, with exceptional people and values, as well as a favorable mix of product and end market exposures.
“The Lee acquisition solidifies our commitment to growing our jerrycan and small plastic bottle footprint and adds a further growth engine to our GIP business.
“I am excited to welcome our new colleagues to the Greif family and look forward to growing our business together with them.”
The all-cash transaction is subject to customary closing conditions, including regulatory clearances. The deal is expected to close by the end of the calendar year.
With more than 500 employees across the US, Lee Container primarily serves agricultural customers and other speciality chemicals, oil & lubricant, and pet care segments in North America.
The company operates three manufacturing facilities in Homerville, Georgia; Centerville, Iowa; and Nacogdoches, Texas, US.
The company recorded sales of US$162 million and adjusted EBITDA of US$33 million in the trailing twelve months ended 30 September 2022.
In October, Greif signed its first sustainable financing transaction as part of its sustainability journey.
From the US$2.4 billion financing package, the US$1.8 billion Secured RCF and Term Loan A-1 had the pricing of the loans tied to Greif’s sustainability performance, captured based on its EcoVadis ESG score.
Greif worked with ING Capital LLC, its sustainability structuring agent, to include an innovative feature to the facility, which is the option to switch to internally set Key Performance Indicators at a later stage, providing additional flexibility as Greif makes continuous progress on its sustainability targets.
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