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Greif buying Caraustar for $1.8 billion

DELAWARE, Ohio (From news reports) -- Greif Inc. is acquiring a recycled paperboard and packaging based outside Atlanta in a $1.8 billion deal announced Thursday.

Delaware-based Greif, one of the world's largest suppliers of industrial packaging products and services, is buying Caraustar Industries Inc. from an affiliate of the Florida private equity firm H.I.G. Capital.

The deal is expected to close in the first quarter of 2019, subject to closing conditions and regulatory approvals.

Caraustar posted revenue of $1.4 billion in the year ended Sept. 30. Greif had sales of $3.87 billion in the fiscal year ended Oct. 31.

Caraustar has more than 80 plants, warehouses and recycling centers in the United States, including several in Ohio.

The deal will immediately add to Greif's earnings, the companies said, and will result in more than $45 million in annual savings within three years through consolidation, transportation and procurement improvements and other initiatives.

"Caraustar offers an exceptional strategic and cultural fit for Greif," Greif CEO Pete Watson said in a press release. "Its complementary paper packaging and recycled fiber operations will drive significant free cash flow growth, improve balance and profitability within the Greif portfolio and increase Greif's exposure to U.S. industrial and consumer end markets.

"Greif is a well-known market leader with a strong manufacturing base," Caraustar CEO Mike Patton said in the release. "Our customers will benefit from Greif's customer service focus and broad product offering and our employees will join a culture with a strong legacy for service and quality."

Wells Fargo Bank, Goldman Sachs and JPMorgan Chase have provided financing commitments for the transaction.

Goldman Sachs acted as financial adviser to Greif. Allen and Overy LLP, Vorys Sater Seymour and Pease LLP and Ice Miller LLP acted as legal advisers to the company. Rothschild & Co and Credit Suisse acted as financial advisers to Caraustar, while Ropes & Gray LLC acted as legal adviser.


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