Graphic Packaging International has closed a transaction to acquire all assets of the foodservice business of RPC Group’s Letica.
The agreement for the $95m transaction was signed in August this year.
Letica Foodservice produces paperboard-based cups and cartons for foodservice clients in North America.
The acquisition includes two foodservice converting facilities in Clarksville, Tennessee, and Pittston, Pennsylvania. The acquisition is expected to enhance Graphic Packaging’s position in the US’s growing paperboard-based foodservice market.
The company also expects to achieve synergies through the integration of additional solid bleached sulphate (SBS) paperboard tonnes, lower logistics costs and other cost efficiencies.
At the time of signing, Graphic Packaging International’s parent company Graphic Packaging Holding Company’s president and CEO Michael Doss said: “The transaction will further diversify our customer base, enhance our geographic footprint, and provide needed capacity to meet the incremental demand for paper cups resulting from the ongoing shift out of polystyrene foam.
“The transaction is consistent with the strategy we outlined after the combination with the SBS mill and foodservice assets that closed on 1 January, specifically our intent to grow our foodservice business organically and through acquisitions and drive higher integration levels for our SBS mills.”
Graphic Packaging’s net sales for Q2 2018 stood at $1.5bn. In January, the company combined its existing businesses with pulp and paper company International Paper’s North America Consumer Packaging. The combined entity is majority owned by Graphic Packaging (79.5%), with International Paper holding the residual interest of 20.5%.
Graphic Packaging provides paper-based packaging solutions to customers in food, beverage, foodservice and other consumer products segments. The company specialises in SBS paperboard, coated unbleached kraft paperboard and coated recycled paperboard.
In the fiscal year ended June 2018, Letica generated $110m in revenue and converted around 40,000t of SBS paperboard.