Greif's Acquisition Of Caraustar To Boost Margins & Sales
Zacks Investment Research | Dec 21, 2018 04:49AM ET
Greif, Inc. (NYSE:GEF) has entered into a definitive agreement to acquire Caraustar Industries, Inc. from an affiliate of H.I.G. Capital for $1.8 billion. The buyout will help strengthen Greif’s leadership in industrial packaging, and will significantly boost its margins, free cash flow and profitability.
Based in Austell, GA, Caraustar is a recycled paperboard and packaging products maker. Caraustar produces uncoated recycled paperboard (URB) and coated recycled paperboard (CRB), and has more than 80 plants, warehouses and recycling centers in the United States. Caraustar posted revenues of $1.4 billion for the year ended Sep 30, 2018, and EBITDA of $174 million.
Benefits of the Acquisition
The Caraustar acquisition is a strategic fit for Greif. Caraustar is vertically integrated in recycled paperboard manufacturing which will also fortify, and balance Greif's portfolio and expand its paper franchise.
Greif, Inc. Price
industry ’s decline of 18%.
Zacks Rank
Greif currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the same sector include DMC Global Inc. (NASDAQ:BOOM) , CECO Environmental Corp. (NASDAQ:CECE) and W.W. Grainger, Inc. (NYSE:GWW) . All these stocks sport a Zacks Rank #2 (Buy). You can see Zacks Investment Research
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