Blackstone's Graham Packaging IPO prices below expectations
The IPO of Graham Packaging, a moulded plastic manufacturer owned by US private equity firm Blackstone, has priced below expectations, according to reports. The company said that it was pricing 16.7 million shares at $10 a share. The company had reportedly been planning to price the IPO at $14 to $16 per share, but reworked the deal to make it more attractive to investors. The $167m IPO value is markedly below earlier forecasts of $350m.
Graham Packaging said that it would contribute the majority of net proceeds from the offering to its indirect subsidiary to repay a portion of its indebtedness, with the remaining net proceeds primarily to pay a one-time termination fee under the company’s monitoring agreement. Any additional proceeds would also go towards cutting debt.
According to reports, Blackstone had been planning to sell 11.5 per cent of its 75.1 per cent stake, but has decided against offloading any of its stake at present.
In June 2008, special purpose acquisition company Hicks Acquisition partnered with Blackstone to take Graham Packaging public in a $3.2bn deal. The companies later terminated the deal.
The company’s net sales for the third quarter 2009 were down over ten per cent from the previous year, from $659.1m to $588.8m. The company also sold off a European subsidiary during the quarter.
Another of Blackstone’s portfolio companies, travel business services company Travelport, announced today that it had cancelled a highly anticipated IPO on the London Stock Exchange due to an uncertain economic environment.
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