NEW YORK (Reuters) – Blackstone-controlled plastic container maker Graham Packaging Co Inc (GRM.N) priced shares in its initial public offering at the low end of the expected range on Wednesday, according to an underwriter.
York, Pennsylvania-based Graham Packaging sold 16.7 million shares for $10 each, raising about $167 million after reworking the deal to be more attractive to investors.
Graham cut the value of its IPO by half earlier on Wednesday, according to a filing with the U.S. Securities and Exchange Commission. It said it hoped to sell 16.7 million shares for $10 to $11 each. It had earlier planned to sell 23.3 million shares for $14 to $16 each.
The company also said in the filing that funds affiliated with private equity backer Blackstone Group (BX.N), which currently owns 75.1 percent of the company, would not sell any shares. Blackstone had originally planned to sell about 11.5 percent of its stake.
Graham Packaging posted net sales of $1.7 billion in the nine months ended Sept. 30, down 13.3 percent from a year ago. Sales to PepsiCo Inc (PEP.N), Graham Packing’s largest customer, accounted for 11.3 percent of sales in the period.
Net income rose 64.2 percent to $60.9 million. The company reported total assets of $2.2 billion and total debt of $2.4 billion.
Graham Packaging said it will use proceeds from the offering to purchase limited partnership units and repay loans, and pay a one-time fee of $26.3 million to Blackstone and $8.8 million to the Graham family. It will also reimburse Blackstone about $0.8 million for historical administrative expenses.
The underwriters were led by Citi, Goldman Sachs & Co and Deutsche Bank Securities. They have the option to purchase an additional 2.5 million shares.
Graham Packaging is expected to begin trading on the New York Stock Exchange on Thursday under the symbol “GRM.” (Reporting by Clare Baldwin in New York, editing by Matthew Lewis and Leslie Gevirtz)