Smufit acquires containerboard firm
International packaging group Smurfit Kappa has today announced plans to buy Orange County Container Group for $340 million (€260 million).
Orange County is a corrugated and containerboard manufacturer with operations in Northern Mexico and the Southern United States. It currently employs 2,800 people.
OCCG produces, markets and sells high graphics and conventional corrugated containers, as well as point-of-purchase displays. The business also produces 290,000 tonnes of recycled containerboard on two paper machines in Dallas. In addition, it operates seven wholly owned recycling centres in Texas, Oklahoma and Arkansas,
The gross assets of the business being acquired are approximately $325 million, and the profit before tax for the year to December 2011 was $6.3 million.
The firm is expected to generate $53 million of EBITDA for the full-year 2012.
The deal, which is expected to be completed in the fourth quarter, is to be financed from Smurfit Kappa’s existing cash resources
Smurfit said OCCG’s strong strategic fit with the group's existing businesses would lead to saving of at least $14 million by the end of next year.
"The acquisition of OCCG provides a complementary portfolio of well-invested assets and quality people. This transaction further increases the contribution of our existing successful Latin American business; providing us with a very significant position within the key Maquiladora trading region and substantially strengthening our position in the higher growth Mexican market," said Smurfit Kappa chief executive Gary McGann.