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Greif GEF announced that it completed the previously announced acquisition of Lee Container Corporation, Inc. for $300 million. The acquisition marks an important step in GEF’s ongoing “Build to Last” mission. Lee Container's product lines will immediately diversify Greif's global portfolio. The buyout is expected to be immediately accretive to GEF’s margins, cash flow and earnings.
The company used its existing credit facility to finance the cash transaction.
Headquartered in Homerville, GA, Lee Container is a leading manufacturer of high-performance barrier and conventional blow-molded containers. The company primarily serves growth-oriented customers in the agricultural, other specialty chemical, oil & lubricant, and pet care segments. It has manufacturing facilities in Homerville, Centerville and Nacogdoches.
As of Sep 30, 2022, Lee Container generated revenues and adjusted EBITDA of $162 million and $33 million, respectively.
The acquisition will provide Greif with immediate scale in jerrycans and small plastic bottles in North America. Greif will have the scope for growth through organic and inorganic reinvestment opportunities. Lee Container's end market will enable Greif's transition to less cyclical end-market exposures. Greif anticipates the incorporation of Lee Containers’ operations into the company's existing business to result in at least $6 million in synergies and performance improvements in the next 24 months.
Greif and Lee Container's strong cultural fit is likely to result in a smooth transition. GEF will report Lee Container's financial results in its Global Industrial Packaging segment.
In the fourth quarter of fiscal 2022, net sales for this segment were $825 million compared with the prior-year quarter’s $952 million. The segment’s adjusted EBITDA was $96 million compared with the year-ago quarter’s $121 million. The results were affected by foreign currency translation and lower volumes. The sale of the Flexibles Products & Services business also negatively impacted sales of this segment by $84 million.
Delaware, OH-based Greif is a leading global producer of industrial packaging products and services. It has manufacturing facilities located in approximately 40 countries. The company reported adjusted earnings of $1.83 per share in fourth-quarter fiscal 2022, down 5.2% year over year. The bottom line missed the Zacks Consensus Estimate of $1.97 per share. Revenues for the quarter were $1.49 billion, missing the Zacks Consensus Estimate of $1.58 billion. The reported figure compared unfavorably with the year-ago quarter’s $1.57 billion.