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2007-07-12 News Release
Graphic Packaging and Altivity
merger
The merger of Graphic Packaging Corporation and Altivity Packaging brings
together two companies that are highly respected leaders in the packaging
industry.
The merger announcement of Graphic Packaging Corporation, Marietta, Georgia,
and Altivity Packaging, LLC, Chicago, Illinois, is expected to create
significant stockholder value by expediting growth opportunities, achieving
significant cost savings and enhancing the credit profile of the newly-formed
company through accelerated debt reduction.
Graphic Packaging Corporation is a leading provider of paperboard packaging
solutions for a wide variety of products to food, beverage and other consumer
products companies.
Altivity Packaging, LLC is the largest privately-held producer of folding
cartons and holds a leading market position in coated-recycled boxboard
and bag packaging. The Company operates
six recycled boxboard mills and 50 consumer-packaging facilities in North
America.
The merger of these two packaging companies brings together 86 high quality
manufacturing and converting facilities and approximately 15,600 people
on five continents, enabling the combined company to better serve customers
and reduce costs. Graphic Packaging has 23 folding carton facilities,
4 mills, 2 packaging machinery manufacturing facilities, and 1 flexible
packaging facility. Altivity Packaging has 24 folding carton facilities,
12 multi-wall & specialty bag facilities, 6 mills, 5 flexible packaging
facilities, 5 ink facilities, 3 label facilities and 1 packaging machinery
equipment facility.
As a result of the transaction, the new company projects it will achieve
annual gross merger synergies of over $90 million expected to be fully
realized by 2011, with approximately 2/3rds realized by 2009.
Under the terms of the transaction, Graphic Packaging will merge into
a newly-formed company, with each existing share of Graphic Packaging
common stock being converted into a share of common stock in the new company.
Affiliates of TPG Capital and the management owners of Altivity Packaging
will contribute all of their equity interests in Altivity Packaging's
holding company to the new company in exchange for shares of the new company's
common stock. Upon closing of the transaction, Graphic Packaging's current
shareholders will initially own approximately 60% of the new company's
common
stock, while the shareholders of Altivity Packaging will initially own
approximately 40%. Shares of the new company, to be named Graphic Packaging
Holding Company, are expected to trade on the New York Stock Exchange
under the trading symbol "GPK". The transaction values Altivity
Packaging at approximately $1.75 billion, based on Altivity Packaging's
current net debt of $1.1 billion (as of March 31, 2007) and Graphic Packaging's
30-trading day average stock price of $4.92 per share (as of July 5, 2007).
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