Reynolds Group Enters Into Definitive Agreement to Acquire Graham Packaging Company Inc.
17 Giugno 2011 - 2:54PM
Business Wire
Reynolds Group Holdings Limited (“Reynolds Group”) today
announced that it has entered into a merger agreement, and an
amendment thereto, to acquire all of the outstanding shares of
Graham Packaging Company Inc. (“Graham”; NYSE: GRM). Reynolds Group
will pay $25.50 in cash for each share of Graham common stock. The
amendment increased the merger consideration to $25.50 in cash per
share (from $25.00 per share) in consideration for Graham agreeing
to materially shorten the time period after which Reynolds Group
could terminate the agreement if Graham’s controlling stockholders
failed to approve the merger by written consent. Funds affiliated
with Blackstone, holding a majority of the outstanding common stock
of Graham, did irrevocably consent in writing to the transaction
following execution of the amendment and consequently, no further
Graham stockholder approval of the merger is required.
The price to be paid pursuant to the merger agreement amendment
represents a total enterprise value, including net debt, of
approximately $4.5 billion. Graham is a leading global supplier of
value-added rigid plastic containers for the food, specialty
beverage and consumer products markets. The transaction is expected
to close in the second half of 2011 and is subject to customary
regulatory approvals and closing conditions.
Reynolds Group expects to finance the purchase price and
associated transaction costs with new indebtedness of up to $5
billion and existing cash on hand. The transaction is supported by
fully committed financing.
Reynolds Group expects to realize strategic benefits and
operational cost synergies as a result of the combination. These
synergies will be achieved primarily through reductions in
administrative expenses, procurement savings and logistics
efficiencies.
Pro forma for the transaction, Reynolds Group’s leverage ratio
is expected to increase by approximately 0.5 times Pro Forma
Adjusted EBITDA. Reynolds Group has a longstanding track record of
deleveraging following the successful integration of
acquisitions.
As part of the transaction, Reynolds Group intends to repay
Graham’s existing credit facilities. Reynolds Group has not made a
decision as to whether it will retire Graham’s existing senior
unsecured notes and senior subordinated notes. To the extent these
notes remain outstanding after the acquisition, Graham will be
required to make a change of control offer.
There can be no assurance that the acquisition of Graham will be
completed or that the expected strategic benefits and operational
cost synergies will be achieved.
About Reynolds Group:
Reynolds Group is a leading global manufacturer and supplier of
consumer food and beverage packaging and storage products: Reynolds
Group is based in Auckland, New Zealand. Additional information
regarding Reynolds Group is available at
www.reynoldsgroupholdings.com.
This announcement is not an offer to sell or a solicitation of
an offer to purchase any indebtedness used to finance the
acquisition of Graham Packaging and shall not constitute an offer,
solicitation or sale in any state or jurisdiction in which, or to
any person to whom such an offer, solicitation or sale would be
unlawful. Any indebtedness that may by used to finance the
acquisition of Graham Packaging may not be registered under the
United States Securities and Exchange Act of 1933, as amended, and
may not be offered or sold within the United States absent
registration or an applicable exemption from registration
requirements.
Forward-Looking Statements:
This press release may contain “forward-looking statements.”
Forward-looking statements include statements regarding the goals,
beliefs, plans or current expectations of Reynolds Group, taking
into account the information currently available to our management.
Forward-looking statements are not statements of historical fact.
For example, when we use words such as “believe,” “anticipate,”
“expect,” “estimate,” “intend,” “should,” “would,” “could,” “may,”
“will” or other words that convey uncertainty of future events or
outcomes, we are making forward-looking statements. While
management has based any forward-looking statements contained
herein on its current expectations, the information on which such
expectations were based may change. These forward-looking
statements rely on a number of assumptions concerning future events
and are subject to a number of risks, uncertainties, and other
factors, many of which are outside of our control that could cause
actual results to materially differ from such statements. Such
uncertainties, risks and assumptions, include, but are not limited
to: risks related to the completion of the acquisition of Graham
(including, without limitation, risks related to Reynolds Group’s
ability to achieve the expected strategic benefits and operational
cost synergies), risks related to the cost of raw materials, our
suppliers for raw materials and any interruption to our supply of
raw materials; risks related to our substantial indebtedness and
our ability to service our indebtedness; risks related to our
aluminium hedging activities and other hedging activities may
result in significant losses and in period-to-period earnings
volatility; risks related to downturns in our target markets; risks
related to increases in interest rates which would increase the
cost of servicing our debt; risks related to dependence on the
protection of our intellectual property and the development of new
products; risks related to exchange rate fluctuations; risks
related to the consolidation of our customer base, competition and
pricing pressure; risks related to the impact of a loss of one of
our manufacturing facilities; risks related to our exposure to
environmental liabilities and potential changes in legislation or
regulation; and risks related to our dependence on key management
and other highly skilled personnel.
Given these risks and uncertainties, you are cautioned not to
place undue reliance on these forward-looking statements, which
speak only as of the date hereof. Except as required by law, we
undertake no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information,
future events or otherwise. All subsequent written and oral
forward-looking statements attributable to us or to persons acting
on our behalf are expressly qualified in their entirety by the
cautionary statements referred to above.
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