Blackstone's Graham Packaging Goes for an IPO

Graham is a worldwide leader in the development of custom blow-molded plastic containers, which are branded for consumer products. Basically, the company provides an alternative to packaging materials like glass, metal and paperboard.

To do this, Graham has developed a variety of technologies, which have more than 1,000 issued patents. For example, the company develops its packaging with complex shapes, reduced weight, view stripes and graphic-intensive customized labeling. Such things can be critical in differentiating products.

Interestingly enough, about a third of Graham's 84 manufacturing facilities are located on-site of customers. As a result, there are larger cost savings, stronger designs and improved inventory management.

Because of its premium offerings -- and strong technology -- Graham has been able to maintain strong profit margins and cash flows. For the first nine months of 2009, cash flow from operations came to $308.2 million.

Although, because of the Blackstone buyout, the company still has $2.2 billion in debt to deal with. And yes, the proceeds from the IPO should help pare this down.

Tom Taulli advises on business tax preparation and resolving tax problems. He is also the author of a variety of books, including the including The Complete M&A Handbook. His website is at Taulli.com.