On Monday, Dallas-based Hicks Acquisition announced an agreement in principle, subject to an impending definitive agreement, where Graham will go public through a transaction with Hicks in partnership with The Blackstone Group – the New York-based owner of Graham Packaging – and the Graham Group. The transaction is expected to be occur later this year, pending a variety of approvals.
Following the transactions completion, the combined enterprise will be renamed Graham Packaging Co., and will apply for listing on the New York Exchange. Blackstone has agreed it will maintain the largest ownership stake for at least two years as it continues to play an important role in guiding the company strategically and operationally.
Hicks Acquisition looked at more than a hundred other potential investments before deciding Graham Packaging was the transaction they wanted to pursue, Hicks spokesman Roy Winnick told Lube Report. We think the companys got a lot of potential.
One advantage of becoming a public company will be gaining access to fresh capital to grow the business, Winnick added. As a public company, it will have a currency – the companys stock – with which to pursue add-on, bolt-on, growth transactions that will help the company fill in gaps in its product line, and expand its footprint, he said.
Hicks Acquisitions existing public stockholders along with founder Thomas Hicks will own 66 percent of Grahams common shares outstanding after the completion of the transaction. The current Graham equity holders, led by Blackstone, will retain 34 percent of the common shares outstanding.
Headquartered in York, Pa., Graham Packaging designs, manufactures and sells customized blow-molded plastic containers for branded automotive lubricant, food and beverage, household and personal care/specialty product categories. The company claims to be the number one supplier in the United States, Canada and Brazil of one-quart/one-liter plastic HDPE (high-density polyethylene) containers for motor oil. According to Grahams investors presentation, the company is gaining share in the fast growing multi-quart auto segment, with 10 percent growth in 2008. Graham posted net sales of $2.5 billion in 2007.
Hicks Acquisition was launched in October 2007 in an initial public offering that generated $552 million in gross proceeds. It currently has no operating businesses.