Graham Packaging plans $350 million IPO

YORK, PA. (Nov. 2, 10:55 p.m. ET) -- Major North American blow molder Graham Packaging Co. announced Nov. 2 that it plans to file an initial public offering.

The York-based company, which is controlled by private equity firm Blackstone Group LP, hopes to raise $350 million through the stock offering, which it would use to repay debt.

In other news, Graham reported that it plans to sell a subsidiary in France, and it disclosed its third quarter results.

In the company's quarterly report, Graham noted that in the second quarter it had signed a letter of intent to sell its wholly-owned Graham Emballages Plastiques S.A.S. subsidiary in Meaux, France, to an independent third party for one euro.

The sale agreement has been signed by all parties and the company expects that the transaction will be completed in the fourth quarter of 2009, according to the report.

Graham decided to sell the plant "due to the failure of this subsidiary to meet internal financial performance criteria."

The company, which currently has debt that is publicly traded, reported sales of  $588.8 million for the quarter ended Sept. 30, down 10.7 percent from the same quarter a year ago.

Sales in North America dropped $61.7 million, or 11 percent, to $500 million. The drop was due in part to lower resin costs, the company reported. The market price for PET resin in the U.S. averaged $0.77 per pound in the third quarter of 2009 compared to $0.96 in the third quarter of 2008, according to Graham, and the market price of high density polyethylene averaged $0.69 in the third quarter of 2009 compared to $1.01 in the third quarter of 2008.

Operating income for the quarter increased to $71.6 million, up from $51.4 million for the same quarter a year ago.

CEO Mark Burgess said in a news release: "While sales volumes have shown improvement, we are still cautious about the overall economic environment, and will remain focused on implementing productivity initiatives, controlling expenses and managing working capital.”

In August, Graham canceled another deal that would have resulted in the company becoming publicly traded. That $3.2 billion deal that would have combined Graham Packaging Holding Co. and Dallas-based Hicks Acquisition Co. Inc., and resulted in a publicly traded firm named Graham Packaging Co. Inc.

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