Powerflute powers ahead with €81 million acquisition

Listed packaging group Powerflute, which is chaired by Dermot Smurfit, has acquired Corenso, an international cores and cardboard producer, for €81 million in a move that doubles the size of the business.

Powerflute, which is listed on the AIM market in London, also announced interim results for the six months to the end of June 30th that showed revenue up by 10 per cent to €72.7 million. Profits before tax increased by 31 per cent to €6.9 million.

Powerflute acquired Corenso from Stora Enso, a Finnish pulp and paper manufacturer. Headquartered in Finland, Corenso has 12 cores plants in Europe, the US and China and three coreboard mills in Finland, France and America.

In the six months to the end of June 30th, Corenso had revenues of €97 million and an operating profit of €8 million.

Powerflute plans to finance the acquisition from cash resources and new debt facilities of €120 million.

‘Significant development’

“The acquisition represents a significant development for both Powerflute and Corenso, and provides an excellent opportunity for Powerflute to deploy its considerable operational expertise and market knowledge to deliver value for shareholders,” Mr Smurfit said.

Stora Enso is expected to continue as Corenso’s largest single customer as it has entered into a core supply agreement for five years.

Dermot Smurfit owns 15.6 per cent of Powerflute, while his brother Dr Michael Smurfit, former chief executive of the Jefferson Smurfit Group, owns 21.7 per cent.

Davy, the stockbroker, described the acquisition of Corenso as “very attractive” for investors relative to the price paid by Powerflute.