Greif announced Monday it has completed a previously noted $145 million all-cash deal growing its ownership in Centurion Container from 9% to 80%. Greif has been linked to the Chicago-area company through a joint venture since 2020. The deal is subject to customary closing adjustments.
Greif says Centurion is the second-largest provider of reconditioned and rebottled intermediate bulk containers and plastic drums in North America, operating eight U.S. reconditioning facilities. Centurion’s net sales totaled $106 million in 2022.
Since the partnership was established, earnings before interest, taxes, depreciation and amortization (EBITDA) have grown nearly eightfold, Greif CEO Ole Rosgaard said during a first quarter earnings call in March. Greif’s Monday announcement states that the new ownership situation “will greatly expand Greif's presence in North America and Centurion's offering of reusable and sustainable packaging solutions.” Rosgaard added in the announcement that the deal is immediately margin-accretive and directly supports its goal of investing in the circular economy.
Greif acquired a minority interest in Centurion for $3.6 million on March 31, 2020. Through certain terms outlined in a regulatory filing that year, Greif has the option to acquire 100% ownership of Centurion come March 31, 2025.
The two companies have coordinated on sales, marketing and IBC collection, according to Centurion’s website. Centurion’s customers gain access to Greif’s IBC products and services, as well as drums, pails and other industrial packaging. Centurion’s Full Circle collection program offers management of empty packaging.
Rosgaard commented on M&A during the earnings call, saying that Greif’s “most attractive targets are close to our core business of industrial packaging, add diversification benefits in product offerings or end markets and are margin accretive. We also want to grow with businesses that have a strong sustainability component.” Rosgaard also said that the Centurion partnership helps accelerate Greif’s growth in resin-based products.
Going forward, Centurion’s financial results will be reported within Greif’s Global Industrial Packaging segment, which makes up over half of Greif’s revenue. It recorded nearly $706 million in net sales in the first quarter.
Also in the Global Industrial Packaging segment, at the end of 2022 Greif closed a $300 million all-cash acquisition of Lee Container. At the time, Rosgaard said Lee “fits perfectly within the strategic parameters of our repeatable M&A playbook,” and that Greif foresaw “add-on acquisitions to further broaden our footprint in jerrycans and small plastics.” The company said both the Centurion and Lee deals were funded through its existing credit facility.
Greif CFO Larry Hilsheimer said during the earnings call that its M&A pipeline, including Centurion, could add an additional $20 million to $40 million of EBITDA in 2023.
