Colorpak to be sold to US

Leading packaging print business Colorpak is being bought by US packaging giant Graphic Packaging International.

The deal is expected to go through by April. Alex Commins and Sid Troiani will remain in their roles as CEO and CFO respectively, and assume responsibility for Graphic Packaging International’s growth ambitions in Australia and New Zealand.

Shares at Colorpak jumped 30 per cent on news of the deal, which will mean the end of an era for the Commins family which has owned or part owned the company since 1985. They currently have 32 per cent of the shares, having cashed in 68 per cent in 2004 when they went public.

Colorpak shareholders are to receive cash payments of $0.68 per share including a cash payment of $0.57 from Graphic Packaging plus up to $0.11 franked dividends per share  Shareholders able to fully utilize franking credits receive value of up to $0.727 per share. Cash payments of $0.68 per share represents a premium of 25.9 per cent  to Colorpak’s closing share price on announcement of the deal.

Revenue for Colorpak in FY2015 was $161m, a shade less than the previous year, but the company was back in profit, to the tune of $3.37m after suffering a $13m loss the previous year.

Colorpak and Graphic Packaging have been business partners for the past decade, as part of a global alliance of packaging outfits designed to enable standardised global output for global clients.

Colorpak Chairman, Geoff Willis says, “Colorpak’s Board considers the proposal highlights the strategic value of our business and provides an opportunity for our shareholders to realise the value of their holdings at an attractive price.”

Graphic Packaging Chairman, David Scheible says, “Colorpak and Graphic Packaging have partnered to provide unique packaging solutions in Australia and New Zealand for close to a decade. This acquisition combines Colorpak’s leading folding carton capabilities with Graphic Packaging’s global expertise and will enhance our ability to serve all customers in this market.

Following the IPO in 2004 Colorpak went through an aggressive acquisition strategy, buying Wadepack a year later, then in 2011 taking over Carter Holt Harvey’s packaging business, propelling it to a new level of business.

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