Tom Hicks may be best known for his media ventures over the years – that and his sports teams – but he’s also made plays in other industries and the deal announced for Hicks Acquisition Company is far outside media.
Hicks formed the publicly traded blind pool about a year ago to raise around $400 million and go out looking for a growing company to buy. What he’s found is Graham Packaging Holdings Company, which Hicks Acquisition Company I is buying for $3.2 billion in a partnership with Blackstone Group.
That price tag makes this the biggest deal ever for a blind pool public stock firm – now officially called a “special-purpose acquisition company” (SPAC). Graham already has public bonds and Blackstone is already involved as an equity backer. After the merger with Hicks Acquisition Company, Blackstone has agreed to maintain its position as the single biggest investor for at least two years. Current Hicks shareholders will own about 66% of the equity. Current Graham shareholders will receive about $350 million in cash, 35 million Hicks shares and 2.8 million warrants.
Of course, the Hicks company will then be renamed Graham Packaging Company. Graham’s CEO and CFO, who were brought in by Blackstone in December 2006, will remain with the company. The company had 2007 net sales of approximately $2.5 billion.
“After considering more than a hundred possible transactions, we’re tremendously pleased to have identified Graham Packaging as the right transaction for Hicks Acquisition, and to be partnering with Blackstone, whose senior partners I have had close business relationships with for many years, and the other Current Graham Equity Holders. Under the leadership since December 2006 of a new management team headed by Chairman and CEO Warren Knowlton and COO/CFO Mark Burgess, Graham Packaging has burnished its already-outstanding reputation as the technology and innovation leader in its industry’s high-value-added segment and has significantly improved its operational and financial performance,” said Tom Hicks.
RBR/TVBR observation: We would, frankly, have been surprised if Tom had gotten back into US media in the current advertising environment. We would not have been surprised at a media investment in a developing part of the world – or a non media investment in the US, which is what happened. Apparently Hicks is convinced that people are going to continue to sports drinks, soft drinks and bottled water and buy all sorts of other products in blow-molded plastic containers.
