Greif Inc. is buying jerrycan maker Lee Container Corp. Inc. in a $300 million, all-cash deal.
The purchase, expected to be completed by the end of 2022, adds manufacturing sites in Homerville, Ga.; Centerville, Iowa; and Nacogdoches, Texas, as well as 500 employees.
Lee Container makes jerrycans — typically rectangular containers with handles and spouts on top — for the agrochemical, specialty chemical, oil, lubricant and pet care markets.
"Lee is an exceptional strategic and cultural fit, with exceptional people and values as well as a favorable mix of product and end market exposures. The Lee acquisition solidifies our commitment to growing our jerrycan and small plastic bottle footprint and adds a further growth engine," Greif CEO Ole Rosgaard said in a statement.
Greif, based in Delaware, Ohio, is a publicly traded company known for a wide range of industrial packaging, including products made from plastics, paper and steel.
Lee Container has been a family-owned business since its founding in 1989 by Don Lee, who purchased the blow molding assets of Brockway-Standard Co. and started in Valdosta, Ga. The company moved to a larger, 100,000-square-foot location in Homerville four years later. The company later expanded in Homerville and created additional locations in Texas and Iowa.
Greif is the larger company overall with total corporate sales of more than $5 billion. Its blow molding operations in North America represent an estimated $120 million of those sales, placing it at No. 23 in the newest Plastics News ranking of blow molders. Lee's sales placed it at No. 20, based on PN data.
"Greif brings additional industry expertise, scale and customer service focus that will be formative in continuing the strong growth fundamentals of the company," Lee Container CEO Robert Varnedoe said in a statement. "Our customers and suppliers will benefit from the enhanced product offering of Greif."
Lee Container had sales of $162 million for the 12 months ending on Sept. 30 and earnings before interest, taxes, depreciation and amortization of $33 million. Greif expects to cut costs by about $6 million per year within two years of ownership by combining Lee Container with its operations, which include an existing line of jerrycans.
Greif indicated the deal's strategic benefits include "immediate scale in jerrycans and small plastic bottles in North America, with a platform for future growth through both organic and inorganic reinvestment opportunities."
The company also gains "favorable exposure to growing agricultural and specialty chemicals end markets, which offers portfolio diversification benefits." Greif also said the deal will add to earnings even before any cost savings.