Colorpak : to be acquired by Graphic Packaging International

0cbb838c-6f0c-4dc4-80ce-32118d701228.pdf

12 January 2016 ASX Announcement

Colorpak to be acquired by Graphic Packaging International

• Colorpak has entered into a Scheme Implementation Deed with Graphic Packaging International under which Graphic Packaging International proposes to acquire 100% of Colorpak shares

• Colorpak shareholders to receive cash payments of $0.68 per share inclusive of a fully franked dividend of up to $0.11 per share

• Shareholders able to fully utilize franking credits receive value of up to $0.727 per share

• Cash payments of $0.68 per share represents a premium of:

  • 25.9% to Colorpak's closing share price yesterday;

  • 26.9% to the 30 day volume weighted average price (VWAP); and

  • 31.5% to the 90 day VWAP

• Colorpak directors unanimously recommend shareholders vote in favour of the Scheme subject to no superior proposal emerging and the Independent Expert concluding that the Scheme is in the best interests of Colorpak's shareholders

• Colorpak's founding Commins family, which together hold 32% of total issued shares, have indicated they will vote in favour of the Scheme subject to no superior proposal being recommended by Colorpak's Board

• BDO has been appointed to act as the Independent Expert

• Expected transaction completion mid-April 2016

Colorpak Limited ("Colorpak") announces today that it has entered into a Scheme Implementation Deed (the "SID") with Graphic Packaging International, Inc. ("Graphic Packaging International"), a wholly owned subsidiary of Graphic Packaging Holding Company, under which Graphic Packaging International proposes to acquire all the issued shares of Colorpak via a Scheme of Arrangement (the "Scheme").

If the Scheme proceeds, Colorpak shareholders will receive $0.68 cash per Colorpak share including any dividends declared by Colorpak after today's announcement.

Colorpak's Board intends to declare total dividends of up to $0.11 per share including a fully franked dividend in respect of the half year ending 31 December 2015 and, subject to the Scheme being approved and finalisation of funding, a fully franked special dividend. For shareholders able to capture the full benefit of franking credits, this is expected to add up to an additional $0.047 per share in value they receive.

The cash payments of $0.68 per share represent a premium of:

• 25.9% to Colorpak's $0.54 closing price on 11 January 2016, the last trading day before this announcement

• 26.9% to the 30 day VWAP of $0.536

• 31.5% to the 90 day VWAP of $0.517

  
  

  The $0.68 offer values Colorpak at $60.0m and compares favourably to recent precedent transactions. It represents a valuation multiple of 7.1x Colorpak's $12.8m Underlying Earnings Before Interest Tax Depreciation and Amortisation for the year ended 30 June 2015 and 15.8x the $0.0431 earnings per share reported for that year.

  
  

  The Colorpak Directors unanimously recommend that Colorpak shareholders vote in favour of the Scheme in the absence of a superior proposal and subject to an independent expert concluding that the Scheme is in the best interests of Colorpak shareholders. Subject to these conditions, each Colorpak Director intends to vote the shareholdings they control in favour of the Scheme.

  
  

  Colorpak's founding Commins family, which together hold 32% of total issued shares, have indicated they will vote in favour of the Scheme subject to no superior proposal being recommended by Colorpak's Board.

  
  

  Colorpak has appointed BDO Corporate Finance (East Coast) Pty Ltd ("BDO") as the Independent Expert. BDO's report will be provided to Colorpak shareholders as part of the Scheme Booklet.

  
  

  Colorpak Chairman, Geoff Willis said, "Colorpak's Board considers the proposal highlights the strategic value of our business and provides an opportunity for our shareholders to realise the value of their holdings at an attractive price. We have been advised that Mr Alex Commins, the current Managing Director of Colorpak and Mr Sid Troiani the current Chief Financial Officer, will remain in their roles and assume responsibility for Graphic Packaging International's growth ambitions in Australia and New Zealand".

  
  

  David Scheible, Graphic Packaging Chairman said, "Colorpak and Graphic Packaging International have partnered to provide unique packaging solutions in Australia and New Zealand for close to a decade. This acquisition combines Colorpak's leading folding carton capabilities with Graphic Packaging International's global expertise and will enhance our ability to serve all customers in this market".

  
  

  Scheme Implementation Deed

  The SID entered into by Colorpak and Graphic Packaging International sets out the terms on which the Scheme will be implemented.

  
  

  The Scheme is subject to certain customary conditions precedent set out in the SID including:

• Colorpak shareholder approval;

• An independent expert opining that the Scheme is in the best interests of shareholders; and

• Court approval by the Supreme Court of Victoria

The SID also sets out other terms and conditions including break fees and exclusivity provisions. A copy of the executed SID is attached to this announcement.

Indicative timetable

A Scheme Booklet containing information relating to the proposed transaction, reasons for the Directors' unanimous recommendation, details of the Scheme meeting and the Independent Expert's report is expected to be sent to shareholders in late February 2016.

Subject to the conditions of the Scheme being satisfied or waived, the Scheme is expected to be implemented in mid-April, 2016.

Colorpak will keep shareholders informed of any material developments and notes that shareholders do not need to do anything at this stage

For further information, please contact:

Investors and Analysts	Media
Colorpak	Michael Brown Pegasus Corporate Advisory [phone]	Geoff Willis Chairman Colorpak [phone]
Graphic Packaging International	Brad Ankerholz Graphic Packaging International [phone]	Sue Appleyard Graphic Packaging International [phone]

About Colorpak Limited

Colorpak is an ASX listed company (ASX:CKL) and one of the largest folding carton producers in Australia and New Zealand. The Colorpak business dates back to the 1920s and has grown to become a prominent participant in the $620m folding carton segment of the paper and board packaging industry in Australia. It has grown from 36 people and $1.5m turnover in 1985 to 580 people and the market leader with a 26 per cent share of the Australian and NZ market. Over the past decade, Colorpak has been consistently rated a leading folding carton supplier for reliable delivery and service with the highest quality standards by BIS Shrapnel Global business research and forecasting. It has operations in Victoria, NSW and Auckland, NZ. Further information may be found at http://www.colorpak.com.au.

About Graphic Packaging Holding Company

Graphic Packaging Holding Company (NYSE: GPK), headquartered in Atlanta, Georgia is a leading provider of packaging solutions for a wide variety of products to food, beverage and other consumer products companies. The Company is one of the largest producers of folding cartons and holds a leading market position in coated-unbleached kraft and coated-recycled board. The Company's customers include some of the most widely recognized companies in the world. Additional information about Graphic Packaging, its business and its products, is available on the Company's website at http://www.graphicpkg.com.

rDLJIPER

EXECUTION VERSION

DATED 2016

COLORPAJ( LIMITED ("CJ

- and -

GRAPHIC PACKAGING INTERNATIONAL, INC.("GPI")

SCHEME IMPLEMENTATION

DEED

DLA Piper Australia

Level 22

No.I Ma1tin Place Sydney NSW 2000

GPO Box 4082

Sydney NSW 2001 Australia

Tel: [phone]

Fax: [phone] JZP/AZT/AUM/ 121 1968387.3