Graphic Packaging's European subsidiary is all set to acquire the UK-based food and healthcare packaging firm Benson Group for approximately $165m.
Subject to standard closing requirements, the transaction will be funded with existing cash and borrowings from Graphic Packaging's existing revolving line of credit, and would be closed in the second quarter of 2014.
Graphic Packaging chairman, president and chief executive officer David Scheible said, "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 $700 million."
With the proposed transaction, the company aims to enhance its packaging offerings in the food and consumer products sector in Europe, and extend the business into the store brand market.
The transaction, which is expected to generate $5-$7m of synergies over the next 18 months, will enable Graphic Packaging to further integrate its coated unbleached kraft paperboard and complement the existing food and beverage business in Europe.
Benson Group, which had recorded twelve month sales of about $200m and EBITDA of nearly $25m, operates four folding carton facilities that convert approximately 80,000 tons of paperboard annually.