Greif to sell Containerboard, Soterra for $2.26B to cut debt amid restructuring

Quick take - Greif, Inc. (NYSE: GEF)

What's happening inside: management is reshaping the portfolio and cutting costs while running heavy divestiture activity. The company recast segments into four material-solution businesses, is selling the Containerboard Business (discontinued operations) for $1,800.0 million and the Soterra land business for ~$462.0 million - proceeds earmarked for debt reduction. There is active restructuring, impairments and asset reclassifications as the company aligns operations to the new structure.

Positive aspects (income statement & cash):
- Gross profit up: $257.3M (Q3 2025) vs $244.9M (Q3 2024); gross margin 22.7% vs 21.0% (Q3).
- Adjusted EBITDA improved: $160.7M (Q3 2025) vs $157.0M (Q3 2024); nine months $412.4M vs $403.8M.
- Operating cash flow strengthened: Net cash provided by operating activities $303.3M (nine months 2025) vs $168.8M (nine months 2024).
- Cash balance increased to $285.2M (July 31, 2025) from $197.7M (Oct 31, 2024).
- Portfolio monetizations pending: Containerboard sale $1,800.0M (expected close Aug 31, 2025) and Soterra sale ~$462.0M (expected close Oct 1, 2025) to be used for debt repayment.

Negative aspects (income statement & risks):
- Operating profit declined sharply: $73.1M (Q3 2025) vs $136.7M (Q3 2024).
- Net income from continuing operations down: $44.7M (Q3 2025) vs $84.5M (Q3 2024); attributable net income $64.0M vs $87.1M.
- Large restructuring, impairment and other one-time charges: restructuring and other charges $25.2M (Q3 2025) vs $2.7M; non-cash asset impairment charges $3.4M (Q3) and $27.8M (YTD).
- SG&A rising: $157.0M (Q3) vs $152.8M, pressure from compensation and acquisition-related amortization.
- Short-term borrowings surged: short-term borrowings $401.9M (July 31, 2025) vs $18.6M (Oct 31, 2024) - largely accounts receivable financing.
- Net income impact from discontinued operations: Q3 discontinued ops added $24.7M, highlighting that core continuing operations are weaker.
- Debt remains sizable: long-term debt, net $2,219.3M (July 31, 2025); total long-term debt outstanding $2,320.1M.

Key facts & metrics (select, factual)
- Total net sales (Q3): $1,134.7M (Q3 2025) vs $1,164.9M (Q3 2024).
- Gross profit (Q3): $257.3M; gross margin 22.7% (Q3 2025).
- Operating profit (Q3): $73.1M (Q3 2025) vs $136.7M (Q3 2024).
- Net income (Q3): $69.4M total; net income attributable to Greif, Inc. $64.0M.
- Discontinued operations (Containerboard) Q3 net sales: $317.2M; operating profit from that business $53.1M (Q3).
- Assets held for sale (Containerboard + others): Total assets from discontinued ops $856.2M (July 31, 2025).
- Cash & equivalents: $285.2M (July 31, 2025) vs $197.7M (Oct 31, 2024).
- Trade receivables, net: $684.9M. Inventories: Raw materials $249.0M; Finished goods $84.0M.
- Total assets: $6,735.1M (July 31, 2025). Total shareholders' equity: $2,238.1M.
- Restructuring reserves: balance $14.5M (July 31, 2025); remaining expected restructuring to incur $30.3M.
- Goodwill: $1,695.8M (July 31, 2025).
- Dividends declared per share (quarter): Class A $0.54; Class B $0.81.

Internal dynamics to watch
- Execution of divestitures and timing of proceeds (Containerboard closes Aug 31, 2025; Soterra expected Oct 1, 2025) - proceeds pledged for debt paydown.
- Restructuring and impairment run-rate - management expects more charges as plants are rationalized; $30.3M remaining expected costs noted.
- Liquidity and working capital: accounts receivable financing and short-term borrowings rose materially; monitor refinancing and covenant compliance (company reports compliance at July 31, 2025).
- Margin recovery drivers: lower raw material costs helped margins; sustaining pricing, volumes and synergies from Ipackchem and other acquisitions will determine medium-term profitability.

Bottom line: Greif is actively reshaping its business - selling sizable assets to cut leverage and refocus on core segments while incurring near-term restructuring and impairment costs. Gross margins and Adjusted EBITDA show resilience, operating profit and continuing-net income are under pressure. The next catalysts are successful closes of the Containerboard and Soterra sales and visible debt reduction and integration benefits from recent acquisitions.