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Greif to take over Caraustar in $1.8bn deal

20 Dec 2018 − 

Consolidation on the global packaging markets is continuing. US packaging producer Greif will significantly expand its footprint in the USA by acquiring Caraustar.

US industrial packaging producer Greif has announced plans to acquire fellow company Caraustar. Caraustar is an integrated recycled board and packaging manufacturer with sales of $1.4bn and 80 operating facilities in the USA and Canada. According to Greif, a definitive agreement has been signed. The transaction price was put at $1.8bn. The takeover is scheduled to be finalised during the first quarter of 2019.

Caraustar is described as a market leader in the production of coated and uncoated recycled board with a variety of applications that include tube and cores as well as specialty products. The company's portfolio includes, amongst others, consumer packaging for example for food applications, industrial packaging such as tubes, protective packaging or adhesives, board and containerboard as well as recovered paper from its recycling operations. Caraustar has 25 recycling facilities across the USA, which process around 4 million t of waste paper.

Caraustar is headquartered in Austell, Georgia/USA and has 80 operating facilities mostly in the USA and some in Canada which generated sales of $1.4bn and an EBITDA of $174m in its financial year 2018 (ended on 31 September 2018). The company is part of the investment company H.I.G. Capital.

Greif is a specialist in industrial packaging. With the takeover, it will significantly expand its presence in the market for paper packaging. The company, which also has products based on other materials in its portfolio, said that its sales from paper packaging will account for approximately 50% of its total sales after conclusion of the deal, while the figure currently stands at 23%. Besides paper-based products such as containerboard and corrugated packaging, Greif also offers steel, plastic or fibre drums, provides filling services and manages timber properties, amongst others.

Greif's presence in the US market will also rise. At the moment, approximately half of the company's sales are generated in its home country and the figure will reportedly increase to around 66%. The company, which has its headquarters in Delaware, Ohio/USA, has around 200 production sites in more than 40 countries.

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