Graphic Packaging Holding Company has announced its European subsidiary will buy Benson Group, a food and healthcare packaging company in the UK for $165m.
The Benson Group operates four folding carton facilities in the UK that convert about 80,000 tons of paperboard a year.
The acquisition is subject to standard closing requirements and is expected to close in the second quarter.
The transaction will be funded with existing cash and borrowings from the company's current revolving line of credit.
Sales in excess of $700m
David Scheible, president/CEO, Graphic Packaging, said the acquisition broadens its food and consumer products offerings and extends its reach into the Store Brand segment.
Clients include Kellogg’s, Nestlé, General Mills, Heineken, SABMiller and AB InBev.
"We are very pleased to announce the acquisition of Benson Group," said Scheible.
“The combination of Benson Group and our existing European businesses is expected to greatly enhance our folding carton business in Europe, with sales in excess of $700m.
“It also allows us to broaden our customer base and to offer our current global customers a wider range of products and services.
“Like our strategy in the US, we are committed to growing our European business around food and beverage end markets and optimizing our supply chain footprint around our customers' needs."
FoodProductionDaily.com reported in January last year,Graphic Packaging completed a £71m ($118m) deal to buy Contego Packaging, after clearance by the UK Office of Fair Trading (OFT) and the purchase of A&R Carton Holding for €19m ($26m).
At the time, the combination of the firm’s European packaging business with the two acquisitions formed one of Europe's largest folding carton businesses and web and sheet-fed converting assets, creating a manufacturing platform similar to its US operations.
Nicholas Mockett, head of Packaging M&A (mergers and acquisition) at Moorgate Capital advisory firm in London said the firm continues to build its presence in Europe.
“Graphic Packaging cartons company in the US, has continued building its presence in the European carton market in the last year, most notably with its acquisition of Contego Cartons," he said.
"The acquisition of Benson Box should enhance relationships with retailers to complement Graphic’s strong position with the large FMCG companies. Benson is a UK supplier of cartons to the supermarkets for retailer private labels and has grown as the supermarkets favour their own brands which typically earn higher margins than selling the famous name equivalent.”
Graphic Packaging Holding Company is headquartered in Atlanta, Georgia, and manufactures folding cartons such as coated-unbleached kraft, coated-recycled boxboard multi-wall bag and other specialty packaging.