Smurfit Kappa Group has acquired Netherlands-based paper and recycling business Reparenco for €460 million.
Omitting synergies, the transaction is 6.4 times the expected EBITDA for full 2018, of €72 million. Including synergies, the acquisition is under 4.5 times the EBITDA.
Under Smurfit Kappa Group's ownership, Reparenco is expected to deliver synergies topping €30 million, according to the packaging firm.
Reparenco operates predominantly in the Netherlands, with a two-machine paper mill with a capacity of 405,000 tonnes of recycled containerboard, as well as the capacity for 270,000 tonnes of graphic paper that has the potential for being converted to containerboard.
Medium-Term Plan
"Reparenco represents early delivery of a central element of our medium-term plan – to increase our European recycled containerboard capacity," said Saverio Mayer, European chief executive at Smurfit Kappa.
"It is ideally situated in our core European operating region, where we continue to see strong demand driven by growth in e-commerce and increased substitution of plastic with paper-based packaging," Mayer added.
He said, "[The mill is] also very well placed on the cost curve and specialises in producing basis weights from 80 to 120 grams, which caters for the market’s growing demand for lighter-weight materials."
In addition, the chief operating officer of Smurfit Kappa's paper division, Laurent Sellier, added, “The acquisition of Reparenco will strengthen our integrated business model and adds 405,000 tonnes of recycled containerboard capacity to our system.
"We are also pleased to have acquired a high-quality graphic paper machine very well positioned in its market. While the machine offers the potential for conversion to containerboard over the medium term, our intention is to continue to produce graphic paper for our customers for the foreseeable future," Sellier added.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Padideh Aghanoury. Click subscribe to sign up to ESM: European Supermarket Magazine.
