Graphic Packaging Acquires Letica Foodservice Assets

Graphic Packaging Holding Company said its subsidiary, Graphic Packaging International, LLC, reached an agreement to acquire substantially all the assets of the foodservice business of Letica Corporation, a subsidiary of RPC Group PLC, for $95 million, subject to standard closing conditions and regulatory review. The transaction is expected to close in the third quarter of 2018.

Letica Foodservice is focused on the production of paperboard-based cold and hot cups and cartons for the foodservice market in North America. The company operates two foodservice converting facilities in Clarksville, TN and Pittston, PA.

The business generated $110 million in revenue and converted approximately 40 thousand tons of solid bleached sulfate paperboard in the 12 months ended June 30, 2018. Synergies from the acquisition will be driven by the integration of additional SBS paperboard tons, lower logistics costs, and other cost efficiencies. On a post-synergy basis, the EV/EBITDA multiple for this transaction is expected to be approximately 6.0X.