Graphic Packaging Holding Company has reached an agreement to acquire substantially all the assets of Artistic Carton Company through a subsidiary, subject to standard closing conditions. The business includes one coated recycled paperboard (CRB) mill located in White Pigeon, Michigan with annual production capacity of approximately 70,000 tons and two converting facilities located in Auburn, Indiana, and Elgin, Illinois. The business generated $63 million in revenue during the 12 months ended June 30, 2019. The business is expected to generate approximately $10 million in annualized EBITDA including anticipated synergies over the next 12-18 months. The transaction is expected to close in the third quarter of 2019.
“We are pleased to announce the acquisition of Artistic Carton as it will provide compelling optimization and growth opportunities for our paperboard mill and converting platforms in North America,” said President and CEO Michael Doss. “The acquisition will drive converting end-market diversification, enhance our converting platform, and we expect will allow us to deliver significant synergies driven by paperboard integration, mill and converting manufacturing optimization, and supply chain efficiencies.”
In other news, the company reported a strong second quarter with net sales increasing 3% to $1,552.8 million compared to $1,510.9 million in the prior year period. The $41.9 million increase was driven by $39.8 million of higher pricing and $16.3 million of improved volume/mix related to acquisitions. These benefits were partially offset by $14.2 million of unfavorable foreign exchange. Net income for second quarter 2019 was $63.8 million, or $0.22 per share, based upon 295.7 million weighted average diluted shares. This compares to second quarter 2018 net income of $49.4 million, or $0.16 per share, based on 311.3 million weighted average diluted shares.
“We reported strong results in the second quarter as our Adjusted EBITDA margin increased 160 basis points year-over-year to 17.2%. Second quarter Adjusted EBITDA of $267 million was ahead of our expectations driven by strong execution on pricing, performance, growth initiatives, and synergies,” said Doss.
