Following the recent $1.8bn (£1.4bn) purchase of Caraustar by Greif, we take a look at the company's history and why Greif has made the purchase
From setting up more than 100 plants to ensuring every last material it uses is recycled, the 80-year history of Caraustar Industries is filled with numerous high points.
Now, the cardboard firm hit another big milestone after being bought by major industrial packaging company Greif in a deal worth $1.8bn (£1.4bn).
Caraustar, which was previously owned by private equity firm HIG Capital, joins a business that, according to markets tracker Macrotrends, is worth only slightly more at about $2bn (£1.6bn).
Greif works in sectors such as packaging accessories, steel and plastic drums and containerboard.
Here, we look back over the history of Caraustar.
History of Caraustar Industries
Caraustar opened its first manufacturing site under the name Carolina Paper Board in Charlotte, North Carolina, in 1938.
The firm then opened its first recycling plant in the same city in 1941, with the second launched in Austell, Georgia.
In the same year, the US joined the Second World War and more paper was recycled because of the need for materials in the military effort.
In 1958, the company took control of a paper tube plant in Rock Hill, South Carolina, called Star Paper Tube.
By 1970, the company had made $24.5m (£19m), with plants in four US towns.
The firm took the name of Caraustar in 1980, moving the company’s headquarters to the Austell in the southeast of the U.S.
The name comes from the original name, Carolina Paper Board (Car); the name of the second city in which it opened a facility, Austell Paper Board (Au); and the firm’s Rock Hill plant, which was called Star Paper Tube (Star).
The company’s spread of factories went up to 44 by the 1990s, with Caraustar becoming one of the US’ top ten recycling firms.
As of 2007, Caraustar had a combined 71 facilities across the US, with two being opened across the border in Canada.
The firm was bought by private equity investment firm HIG Capital in May 2013.
Principal of HIG at the time Tenno Tsai said: “Caraustar is a market leader with a blue-chip customer base, broad geographic footprint and an efficient, high-quality manufacturing portfolio.”
The company currently owns over 100 recycling and production facilities across the US, with five being based in Canada.
What does Caraustar Industries do?
The firm works in a variety of areas, from the likes of industrial packaging to recycling.
The company also develops consumer packaging, which includes food, healthcare and household products, and works with transportation firms such as FedEx.
The recycling facilities Caraustar operates across the US collect, sort and process more than four million tonnes of waste paper each year, which is then re-used.
Because of these facilities, it means it can operate a circular economy production policy, which allows 100% of its content to be made from recycled materials.
The current chief executive is Michael Patton, who took the role in May 2010.
After being appointed, he said: “This is a great organisation that has a history of customer service and innovation derived from outstanding people and long-term customer relationships.”
Why did Greif buy Caraustar Industries?
After announcing the buyout, Greif president and chief executive Peter Watson said: “The addition of Caraustar bolsters our leadership position and enhances our existing portfolio of packaging solutions.
“We look forward to delivering on the opportunities that the addition of Caraustar provides for our team, our customers and our shareholders.”
HIG Capital managing director Tenno Tsai said: “As a leader in the recycled paperboard and packaging solutions market, Caraustar’s ability to deliver a broad product portfolio to a national customer base via a low-cost, vertically-integrated manufacturing network provides a value proposition unmatched in the industry.”
Greif is expecting to receive up to $45m (£35m) in extra profits.