Graphic Packaging to enter fiber mailer space with acquisition of Bell Incorporated

USA – Leading fiber-based packaging provider Graphic Packaging International has entered into a definitive agreement to acquire Bell Incorporated.

The proposed acquisition is expected to add approximately US$200 million in sales, US$30 million in Adjusted EBITDA and will support strategic priorities of increasing integration rates and expanding customers and categories.

Annual synergies of approximately US$10 million are expected within 24 months of closing. The transaction includes three well-capitalized packaging facilities in the Midwest that consume 95,000 tonnes of paperboard annually.

The transaction is expected to close in the fourth quarter of 2023, subject to regulatory approvals and other customary closing conditions.

Graphic Packaging’s Q2 net sales increased by 1%

Meanwhile, Graphic Packaging has registered a net income of US$150m in the second quarter (Q2) of 2023, representing a 127% increase from the US$66m achieved in Q2 2022.

The company’s basic and diluted net income per share in Q2 2023 was $0.49 versus $0.21 during the same quarter last year.

For the reported quarter, which ended on 30 June 2023, the company posted a 1% rise in its net sales to US$2.39bn from US$2.35bn in 2022.

This increase in sales can mainly be attributed to US$188m of positive pricing, which was partly offset by an unfavorable volume/mix of US$154m.

Graphic’s earnings before interest, taxes, depreciation, and amortization (EBITDA) stood at US$434m while the same was US$294m in the prior year’s period.

Graphic’s president and CEO Michael Doss said: “We grew sales, adjusted EBITDA and adjusted EBITDA margins year-over-year in the Q2 while actively managing supply to meet demand in response to short-term inventory destocking by retailers and our customers.

“Importantly, our global team continued to advance key initiatives to drive sustained future organic growth and higher profitability through commercial execution, quality improvement and cost reduction.”

ABP Food Group partnership

In another development, Graphic Packaging recently forged a partnership with Irish beef exporter and food processor ABP Food Group to develop two new lines of chilled meat packaging for UK supermarket Aldi.

Developed for the retail giant’s core and premium steak lines, the pressed board trays use around 90% less plastic when compared to its previous plastic-based packaging format.

The vacuum skin packaging pressed board trays have an easy-peel film to promote recycling of the paperboard tray at home by consumers.

The collaboration supports Aldi’s goal of removing 2 billion pieces of plastic packaging from its supply chain by 2025.

The hybrid design means plastic is reduced to a minimum while still providing the equivalent barrier performance and shelf life to traditional plastic trays. Additionally, the trays were designed to ensure smooth running on ABP’s packing lines, with no machinery investment or retooling required.

Paul Tye, business development director for food and convenience, tray and cup solutions at Graphic Packaging, said: “Everything we do is geared toward making our customers’ transition from plastic into fiber-based packaging as seamless as possible, and we are so delighted that we were able to achieve that for ABP and Aldi.”

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