News

Graham Packaging Holdings is set to be bought by acquisition vehicle Hicks Acquisition Company with The Blackstone Group in a USD3.2bn deal.

The global plastic packaging group will be renamed Graham Packaging Company and will be listed on the New York Stock Exchange once the transaction is completed.

After considering more than 100 possible investments, Dallas-based Hicks Acquisition, the special purpose acquisition company formed by Thomas Hicks, will control around 66% of the Graham shares that will remain outstanding once the deal is completed.

Blackstone will own 34% of Graham's publicly traded shares and has agreed that it will maintain its stake for at least two years as it continues to guide the company both strategically and operationally.

Graham Packaging Holdings' existing management team, including chairman and chief executive Warren Knowlton and chief operating and finance officer Mark Burgess, will continue to run the company.

"With the support of our new ownership group and our strong free cash flow from operations, we will continue to invest in and grow our business, pay down debt and accelerate our earnings growth," said Knowlton.

The proposed deal is yet to be finalised. It requires, among other things, the support of more than 50% of Hicks Acquisition's public stockholders.

Blackstone bought a controlling stake in Graham Packaging in 1998, building the business by purchasing the plastic container division of Owens-Illinois for $1.2bn in 2004.

Graham Packaging, based in York, Pennsylvania, was founded in 1972. It has 83 plants in North America, Europe and South America. Net sales in 2007 were $2.5bn.

The firm produces more than 20 billion blow-moulded plastic containers per year for customers in food and beverage, household goods, personal care and automotive lubricants.