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Greif (GEF) Buys Lee Container for $300M, Diversifies Portfolio
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Greif (GEF - Free Report) announced that it completed the previously announced acquisition of Lee Container Corporation, Inc. for $300 million. The acquisition marks an important step in GEF’s ongoing “Build to Last” mission. Lee Container's product lines will immediately diversify Greif's global portfolio. The buyout is expected to be immediately accretive to GEF’s margins, cash flow and earnings.
The company used its existing credit facility to finance the cash transaction.
Headquartered in Homerville, GA, Lee Container is a leading manufacturer of high-performance barrier and conventional blow-molded containers. The company primarily serves growth-oriented customers in the agricultural, other specialty chemical, oil & lubricant, and pet care segments. It has manufacturing facilities in Homerville, Centerville and Nacogdoches.
As of Sep 30, 2022, Lee Container generated revenues and adjusted EBITDA of $162 million and $33 million, respectively.
The acquisition will provide Greif with immediate scale in jerrycans and small plastic bottles in North America. Greif will have the scope for growth through organic and inorganic reinvestment opportunities. Lee Container's end market will enable Greif's transition to less cyclical end-market exposures. Greif anticipates the incorporation of Lee Containers’ operations into the company's existing business to result in at least $6 million in synergies and performance improvements in the next 24 months.
Greif and Lee Container's strong cultural fit is likely to result in a smooth transition. GEF will report Lee Container's financial results in its Global Industrial Packaging segment.
In the fourth quarter of fiscal 2022, net sales for this segment were $825 million compared with the prior-year quarter’s $952 million. The segment’s adjusted EBITDA was $96 million compared with the year-ago quarter’s $121 million. The results were affected by foreign currency translation and lower volumes. The sale of the Flexibles Products & Services business also negatively impacted sales of this segment by $84 million.
Delaware, OH-based Greif is a leading global producer of industrial packaging products and services. It has manufacturing facilities located in approximately 40 countries. The company reported adjusted earnings of $1.83 per share in fourth-quarter fiscal 2022, down 5.2% year over year. The bottom line missed the Zacks Consensus Estimate of $1.97 per share. Revenues for the quarter were $1.49 billion, missing the Zacks Consensus Estimate of $1.58 billion. The reported figure compared unfavorably with the year-ago quarter’s $1.57 billion.
Greif anticipates fiscal 2023 adjusted free cash flow between $410 million and $460 million. Adjusted EBITDA is expected to be between $820 million and $906 million.
Price Performance
Grief’s (GEF - Free Report) shares gained 17.2% in the last year, against the industry’s fall of 1.2%.
KnowBe4’s earnings surprise in the last four quarters was 216.7%, on average. The Zacks Consensus Estimate for the company’s 2022 earnings is pegged at 24 cents, indicating a year-over-year increase of 118.2%. The consensus estimate has moved up 20% in the past 60 days. KNBE’s shares have gained 7.5% in a year.
The Zacks Consensus Estimate for Hudson’s current-year earnings per share is pegged at $2.16, suggesting an increase of 213% from that reported in the last year. The consensus estimate moved 20.7% upward in the last 60 days. It has a trailing four-quarter average earnings surprise of 297%. HDSN’s shares have gained 149.9% in the last year.
Hubbell has an average trailing four-quarter earnings surprise of 10.6%. The Zacks Consensus Estimate for HUBB’s current-year earnings is pegged at $10.41 per share. This indicates a 29.3% increase from the prior year’s reported figure. The consensus estimate has been revised 4.8% north in the past 60 days. Its shares gained 14.5% in the last year.
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Greif (GEF) Buys Lee Container for $300M, Diversifies Portfolio
Greif (GEF - Free Report) announced that it completed the previously announced acquisition of Lee Container Corporation, Inc. for $300 million. The acquisition marks an important step in GEF’s ongoing “Build to Last” mission. Lee Container's product lines will immediately diversify Greif's global portfolio. The buyout is expected to be immediately accretive to GEF’s margins, cash flow and earnings.
The company used its existing credit facility to finance the cash transaction.
Headquartered in Homerville, GA, Lee Container is a leading manufacturer of high-performance barrier and conventional blow-molded containers. The company primarily serves growth-oriented customers in the agricultural, other specialty chemical, oil & lubricant, and pet care segments. It has manufacturing facilities in Homerville, Centerville and Nacogdoches.
As of Sep 30, 2022, Lee Container generated revenues and adjusted EBITDA of $162 million and $33 million, respectively.
The acquisition will provide Greif with immediate scale in jerrycans and small plastic bottles in North America. Greif will have the scope for growth through organic and inorganic reinvestment opportunities. Lee Container's end market will enable Greif's transition to less cyclical end-market exposures. Greif anticipates the incorporation of Lee Containers’ operations into the company's existing business to result in at least $6 million in synergies and performance improvements in the next 24 months.
Greif and Lee Container's strong cultural fit is likely to result in a smooth transition. GEF will report Lee Container's financial results in its Global Industrial Packaging segment.
In the fourth quarter of fiscal 2022, net sales for this segment were $825 million compared with the prior-year quarter’s $952 million. The segment’s adjusted EBITDA was $96 million compared with the year-ago quarter’s $121 million. The results were affected by foreign currency translation and lower volumes. The sale of the Flexibles Products & Services business also negatively impacted sales of this segment by $84 million.
Delaware, OH-based Greif is a leading global producer of industrial packaging products and services. It has manufacturing facilities located in approximately 40 countries. The company reported adjusted earnings of $1.83 per share in fourth-quarter fiscal 2022, down 5.2% year over year. The bottom line missed the Zacks Consensus Estimate of $1.97 per share. Revenues for the quarter were $1.49 billion, missing the Zacks Consensus Estimate of $1.58 billion. The reported figure compared unfavorably with the year-ago quarter’s $1.57 billion.
Greif anticipates fiscal 2023 adjusted free cash flow between $410 million and $460 million. Adjusted EBITDA is expected to be between $820 million and $906 million.
Price Performance
Grief’s (GEF - Free Report) shares gained 17.2% in the last year, against the industry’s fall of 1.2%.
Image Source: Zacks Investment Research
Zacks Rank and Stocks to Consider
GEF currently carries a Zacks Rank of 4 (Sell).
Some better-ranked stocks from the Industrial Products sector are KnowBe4 , Hudson Technologies (HDSN - Free Report) , and Hubbell (HUBB - Free Report) . KNBE and HDSN flaunt a Zacks Rank #1 (Strong Buy) at present, while HUBB has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
KnowBe4’s earnings surprise in the last four quarters was 216.7%, on average. The Zacks Consensus Estimate for the company’s 2022 earnings is pegged at 24 cents, indicating a year-over-year increase of 118.2%. The consensus estimate has moved up 20% in the past 60 days. KNBE’s shares have gained 7.5% in a year.
The Zacks Consensus Estimate for Hudson’s current-year earnings per share is pegged at $2.16, suggesting an increase of 213% from that reported in the last year. The consensus estimate moved 20.7% upward in the last 60 days. It has a trailing four-quarter average earnings surprise of 297%. HDSN’s shares have gained 149.9% in the last year.
Hubbell has an average trailing four-quarter earnings surprise of 10.6%. The Zacks Consensus Estimate for HUBB’s current-year earnings is pegged at $10.41 per share. This indicates a 29.3% increase from the prior year’s reported figure. The consensus estimate has been revised 4.8% north in the past 60 days. Its shares gained 14.5% in the last year.