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Graphic Packaging gets commitments for $2.2 billion of new bank debt and new revolver
By Sara Rosenberg
New York, July 11 - Graphic Packaging Holding Co., a newly formed company, has received a commitment for $2.2 billion of bank debt and a commitment for a substantial revolving credit facility in connection with the merger between Graphic Packaging Corp. and Altivity Packaging, LLC, according to a 425 filed with the Securities and Exchange Commission Wednesday.
Goldman Sachs, JPMorgan and Bank of America are the lead banks on the deal.
Proceeds from the bank debt will be used to refinance debt facilities at Graphic Packaging and Altivity, and for general corporate purposes.
Graphic Packaging's bonds are expected to remain in place.
Under the terms of the transaction, Graphic Packaging will merge into the newly formed company, with each existing share of Graphic Packaging common stock being converted into a share of common stock in the new company.
Affiliates of TPG Capital and the management owners of Altivity will contribute all of their equity interests in Altivity's holding company to the new company in exchange for shares of the new company's common stock.
Upon closing, Graphic Packaging's current shareholders will initially own about 60% of the new company's common stock, while the shareholders of Altivity will initially own about 40%.
The transaction values Altivity at $1.75 billion, based on Altivity's current net debt of $1.1 billion and Graphic Packaging's 30-trading day average stock price of $4.92 per share as of July 5.
The new company is expected to generate higher earnings and cash flow that will be used to accelerate debt reduction, finance ongoing investments and fund growth initiatives.
The transaction is expected to be completed in the fourth quarter, subject to customary shareholder and regulatory approvals.
Graphic Packaging Holding is a Marietta, Ga., paperboard packaging company.
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