Jefferies tips further acquisitions at Smurfit Kappa

US investment bank Jefferies said Smurfit Kappa may boost earnings again this year by venturing out on the acquisitions trail again.

In a note to clients, the bank said its “upside scenario” for the Irish paper packaging giant sees it following up on last year’s €380 million deals spend with a further €300 million of deals.

"Smurfit Kappa continues to consolidate the fragmented European and Latin American corrugated [cardboard boxes] markets," said analysts Justin Jordan and Tom Halton at Jefferies in the note, adding that it expects further mergers and acquisitions across the industry globally this year.

Last year saw Smurfit Kappa enter the Brazilian market, spending €186 million on two Brazilian paper-based packaging businesses. Chief executive Tony Smurfit said in May the company could as much as €400 million a year on deals without denting its balance sheet.

He signalled at the time that the company would be most interested in purchases in the US, although valuations in the market were looking a bit “stretched”.