Graham Packaging Co. has a new majority owner, giving the York, Pa.-based blow molder greater financial resources to pursue acquisitions.
Blackstone Group, a private New York investment bank specializing in leveraged buyouts, is buying the stake from owner Donald C. Graham. Details of the transaction, which is scheduled to close in the first quarter of 1998, were not announced.
Graham Packaging ranked No. 5 in Plastics News' 1997 survey of North American blow molders, with estimated related sales of $515 million. The company's current global growth plans include doubling the business over the next five years. According to the firm, it has several undisclosed acquisition targets that could accelerate those plans.
Blackstone Group's investment does not include York-based blow molding machinery supplier Graham Engineering Corp. or any other Graham companies.
Blackstone Capital Partners III, a $4 billion private equity fund, made the investment in Graham. Blackstone created the fund — which it billed as the second-largest of its kind in the world —in October.
Blackstone is known for making corporate partnership investments, in which it buys assets together with an operating company, or takes a share of a company's divestitures. Such deals generate capital for the operating company without weakening its balance sheet, according to Stephen Schwarzman, president of Blackstone Group.
Goldman, Sachs and Co. acted as Graham Cos.' financial adviser on the deal.
Donald Graham will serve as chairman of the Partners' Advisory Board and Phil Yates will assume the role of chief executive officer and president of the global packaging business.
Graham's most recent acquisition came in May when it formed a new subsidiary, Graham Packaging do Brasil Industria e Comercio SA, to buy the assets of Rheem Graham in Brazil. The deal included plants in Rio de Janeiro, Sao Paulo and Santos.