Graphic Packaging to Acquire Sweden's AR Packaging for $1.45 Billion

AR Packaging is Europe's second largest producer of fiber-based consumer packaging with net sales of approximately $1.1 billion, 5,000 employees and 30 factories in 13 countries.

May 14, 2021 - Graphic Packaging Holding Company (NYSE: GPK), ("Graphic Packaging" or the "Company") and CVC Capital Partners Fund VI today announced a definitive agreement under which Graphic Packaging will acquire AR Packaging Group AB ("AR Packaging"), Europe's second largest producer of fiber-based consumer packaging, for approximately $1.45 billion in cash, subject to customary adjustments.

The combination enhances Graphic Packaging's global scale, innovation capabilities, and value proposition for customers throughout Europe and bordering regions. With a broad set of industry-leading packaging solutions, design expertise, and expanded geographic reach, the combined company will be uniquely positioned to capture continued organic growth opportunities across existing and new global customers and markets.

The proposed acquisition of AR Packaging is expected to add $1.1 billion in annual sales and $160 million in annual Adjusted EBITDA. In addition, the combination is expected to drive total synergies of $40 million over 36 months following close. The deal is expected to be immediately accretive to the Company's earnings per share and cash flow.

Michael Doss, Graphic Packaging's President and CEO said, "AR Packaging is a leader in the attractive and growing market for sustainable packaging in Europe. Acquiring AR Packaging will result in significant value creation opportunities for our customers, our employees, and our stockholders as we bring together two leading providers of fiber-based consumer packaging solutions with long histories of innovation and creative packaging design.

"The large, distributed footprint of AR Packaging's 25 converting facilities across Eastern and Western Europe provides significant scale and cost efficiency benefits strengthening our combined presence and ability to service customers throughout Europe and globally.

"We are pleased to welcome the AR Packaging team as we work together to further advance our commitment to sustainable packaging solutions for global consumers in support of the move to a more circular economy."

Stephen Scherger, Graphic Packaging's EVP and CFO added, "The acquisition of AR Packaging expands our opportunities to serve and grow in markets around the world with our sustainable packaging solutions. The combination, together with our previously announced acquisition of Americraft Carton, supports our growth goals and positions Graphic Packaging to consistently deliver organic sales growth at the high end of our 100 to 200 basis points goal as outlined in Vision 2025. Notably, the lean operating models executed by both organizations, coupled with our complementary market segments, provide compelling financial benefits. The significant cash flow generation capability of the combination will drive strong returns and is expected to return Graphic Packaging to our long-term 2.5-3.0x target leverage range within 24 months following close."

AR Packaging's President and CEO, Harald Schulz, said, "I am proud of the progress we have made in establishing a clear strategy and building AR Packaging into a respected provider of packaging solutions. I want to thank CVC for their support in those efforts over the last five years. Graphic Packaging's shared approach to customer service and deep focus on providing innovative, sustainable solutions closely aligns with how we operate our own business, making them an ideal partner. The ability to leverage beneficial value chain integration, from paperboard manufacturing to carton converting, provides increased possibilities to offer sustainably optimized solutions to our customers. Our team looks forward to joining with the Graphic Packaging team to become the premier global provider of sustainable fiber-based packaging solutions."

The transaction, which has been unanimously approved by the Boards of Directors of Graphic Packaging and AR Packaging, is expected to close in four to six months, subject to regulatory approvals and other customary closing conditions.

About AR Packaging Group AB

AR Packaging is one of Europe's leading companies in the packaging sector with net sales of approximately $1.1 billion, 5,000 employees and 30 factories in 13 countries. The Group offers a unique range of packaging solutions from its specialized plants. Added value is created to its customers through its broad product offering and deep knowledge of carton-based and flexible packaging. Business is registered in Lund, Sweden www.ar-packaging.com.

Graphic Packaging Holding Company, headquartered in Atlanta, Georgia, is committed to providing consumer packaging that makes a world of difference. The Company is a leading provider of sustainable paper-based packaging solutions for a wide variety of products to food, beverage, foodservice, and other consumer products companies. The Company operates on a global basis, is one of the largest producers of folding cartons and paper-based foodservice products in the United States, and holds leading market positions in coated recycled paperboard, coated unbleached kraft paperboard and solid bleached sulfate paperboard. To learn more, visit: www.graphicpkg.com.

SOURCE: Graphic Packaging Holding Company