An Atlanta company that wants to focus on paperboard packaging is selling its Arkansas operations as part of a $105 million deal involving nine U.S. plants that produce multilayer bags, one of which is in Pine Bluff, as well as a Pine Bluff kraft paper mill.
Mondi Group, based in Johannesburg, will buy the Pine Bluff facilities, the plant's current owner, Graphic Packaging Holding Co., said in a statement.
"Mondi's aim is to strengthen and grow the Kraft Paper and Industrial Bags businesses in North America," Mondi spokesman Kerry Cooper wrote in an email in response to questions about the transaction. Cooper said it's too early to say whether the company will make any changes at the Pine Bluff operations.
Cooper said Mondi's other U.S. facilities include an industrial bag plant in Romeoville, Ill., as well as operations in several other locations. In addition, the South African company has three industrial bag plants in Mexico.
Mondi describes itself as an international packaging and paper group that employs 24,400 people in production facilities in 30 countries, according to its website, which says it has operations in central Europe, Russia, the Americas and South Africa.
In the deal, Graphic Packaging will sell nine bag plants and the kraft paper mill for $105 million in cash. Graphic Packaging said that combined, the plants had revenue totaling $437 million in the 12-month period ending in March.
The kraft paper mill, formerly known as Delta Natural Kraft and before that Gaylord Container, has been operating in Pine Bluff since the 1950s, according to Rhonda Dishner, executive assistant for economic development with the Economic Development Alliance for Jefferson County. It has 187 employees, according to Graphic Packaging spokesman Amy MacKinnon.
Graphic Packaging's multiwall bag mill was formerly known as Mid-America Packaging and has about 221 employees. Multiwall bags are used to hold bulk products, such as dog and cat food, or construction materials, such as sand and cement.
Graphic Packaging said the all-cash transaction is expected to close either in the late second quarter or early in the third quarter of 2014. Graphic Packaging provides packaging solutions for a wide variety of products to food, beverage and other consumer products companies, according to its website.
"The anticipated sale of these non-core assets substantially completes our transformation into a pure play, vertically integrated paperboard packaging company," David Scheible, Graphic Packaging's chairman, president and chief executive officer, said in a news release. "The divestiture will free up valuable resources which we can redirect to further accelerate global growth in our core paperboard packaging business."
Business on 06/05/2014