SKG Smurfit Kappa Group Plc

 
TIDMSKG 
 
 

Smurfit Kappa Enters Brazilian Packaging Market

SKG.I SKG.L

Acquires two Brazilian packaging businesses for EUR186 million

Smurfit Kappa Group plc ('SKG or the 'Group') one of the world's largest integrated manufacturers of paper-based packaging products with operations in Europe and the Americas, has acquired two integrated paper-based packaging businesses, Industria de Embalagens Santana ('INPA') and Paema Embalagens ('Paema'), based in Brazil, for a total consideration of approximately EUR186 million (R$805 million).

Both INPA and Paema are privately owned integrated packaging businesses. The combined operations have three recycled containerboard mills with a total capacity of 210,000 tonnes and four corrugated facilities servicing the Northeast of Brazil, through the Rio and Sao Paulo regions and the South of the country. The net assets of INPA and Paema at 30 September 2015 were EUR30 million (R$129 million) and EUR6 million (R$26 million) respectively.

The size and location of the combined operations will build on the Group's leadership position as the largest pan-regional corrugated packaging supplier in Latin America. SKG will also enhance the two businesses through the application of the Group's best-in-class operating systems and design and innovation capability. Furthermore, the Group's enlarged global footprint will improve its packaging offering to multinationals operating throughout The Americas region.

The combined business employs over 1,700 people and the Group currently expects to generate synergies of approximately EUR6 million (R$28 million) to be delivered by the end of 2017, primarily through operational improvements and supply chain optimisation as the businesses are integrated. As a consequence, the post synergy 2015 EV/EBITDA multiple of the combined business is expected to be 6.3 times.

The transaction was completed at the end of December 2015 and will be immediately earnings accretive. The consideration was funded from the Group's existing liquidity, comprising primarily cash resources together with the existing committed credit facilities.

Tony Smurfit, Smurfit Kappa Group CEO, commented: "We are pleased to announce the acquisition of INPA and Paema, which will extend our reach into a strategically important market and build on our geographic diversity and strength. We look forward to welcoming the experienced teams into the Smurfit Kappa Group. We are confident that their expertise and the high quality of their asset base will provide us with a strong entry point into the Brazilian market and, as the leading pan-regional operator in Latin America, further strengthen our service offering to our existing international customers."

ENDS

 
Contact 
Seamus Murphy              FTI Consulting 
Smurfit Kappa 
T: +353 1 202 71 80        T: +353 1 663 36 86 
E: ir@smurfitkappa.com     E: smurfitkappa@fticonsulting.com 
 
 
 

About Smurfit Kappa

Smurfit Kappa is one of the leading providers of paper-based packaging solutions in the world, with around 43,000 employees in approximately 350 production sites across 33 countries and with revenue of EUR8.1 billion in 2014. We are located in 21 countries in Europe, and 12 in the Americas. We are the only large-scale pan-regional player in Latin America.

With our pro-active team we relentlessly use our extensive experience and expertise, supported by our scale, to open up opportunities for our customers. We collaborate with forward thinking customers by sharing superior product knowledge, market understanding and insights in packaging trends to ensure business success in their markets. We have an unrivalled portfolio of paper-packaging solutions, which is constantly updated with our market-leading innovations. This is enhanced through the benefits of our integration, with optimal paper design, logistics, timeliness of service, and our packaging plants sourcing most of their raw materials from our own paper mills. Our products, which are 100% renewable and produced sustainably, improve the environmental footprint of our customers.

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View source version on businesswire.com: http://www.businesswire.com/news/home/20160103005065/en/

 
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(END) Dow Jones Newswires

January 04, 2016 02:00 ET (07:00 GMT)

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