US-based commercial packaging giant Graphic Packaging International will be acquiring 100% shares for Colorpak, which operates as a folding carton supplier in Australia and New Zealand.

The firm has agreed to pay $0.68 a share inclusive of a fully franked dividend of up to $0.11 a share to Colorpak shareholders, valuing Colorpak at $60m.

Shares prices for Colorpak have soared up to 31% after the takeover bid was announced, reports The Sydney Morning Herald.

The firm operates through two facilities in Melbourne and Sydney in Australia, and another one in Auckland, New Zealand. The three plants have a combined capacity to annually convert around 38,000t of paperboard into folding cartons for food, beverage and consumer product markets.

"This acquisition will broaden our customer base and offer current customers a wider range of products."

Graphic Packaging president and CEO Michael Doss said: "Similar to our strategy in the US and Europe, we are committed to growing our business in developed food and beverage end markets and optimising our global supply chain.

"While Graphic Packaging currently has a well-established presence in Australia, the acquisition of Colorpak and its three world class folding carton manufacturing facilities allows us to expand our proven integrated supply chain in the Australia and New Zealand food, beverage and consumer product markets.

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"This acquisition will broaden our customer base and offer current customers a wider range of products."

However, the acquisition awaits Colorpak shareholder approval, court and regulatory reviews and needs to abide by the standard closing requirements. The deal is expected to be closed by the second quarter this year.

Colorpak chairman Geoff Willis said: "Colorpak’s board considers the proposal highlights the strategic value of our business and provides an opportunity for our shareholders to realise the value of their holdings at an attractive price.

"We have been advised that Mr Alex Commins, the current managing director of Colorpak, and Mr Sid Troiani, the current chief financial officer, will remain in their roles and assume responsibility for Graphic Packaging International’s growth ambitions in Australia and New Zealand."

Image: Graphic Packaging chairman David Scheible and Colorpak MD Alex Commins. Photo: courtesy of Colorpak.