Irish packaging manufacturer Smurfit Kappa has agreed to acquire Dutch paper and recycling business Reparenco for approximately €460 million.
Smurfit, which is one of the world’s largest integrated manufacturers of paper-based packaging products with operations in Europe and the Americas, announced details of the deal on Thursday.
Reparenco operates a paper mill in the Netherlands with a capacity of 675,000 tonnes, together with a 750,000-tonne recovered fibre operation.The mill comprises two machines with a capacity of 405,000 tonnes of recycled containerboard and 270,000 tonnes of graphic paper.
Reparenco employs 315 people and has gross assets of €189 million. It generated earnings before interest, taxes, depreciation, and amortisation (ebitda) of €41 million in the year to April 2018, during which time the business continued to “ramp up production”.
Smurfit said Reparenco’s “strong strategic fit” with its existing European businesses was expected to deliver “significant synergies in the near-term in a number of areas”. These include increased integration of containerboard and the recycling operations into the company.
The cash consideration will be funded from Smurfit’s existing resources. It is expected the transaction will be complete within four to six weeks subject to customary completion conditions, and adjustments and regulatory approval.
Smurfit Kappa chief executive Tony Smurfit said the acquisition would bring value for shareholders.
“We are pleased to announce our agreement to acquire Reparenco, successfully concluding a process which began on February 1st this year. The acquisition of Reparenco is complementary with our existing business; strengthens our integrated business model; and accelerates a central element of our medium-term plan.
“We welcome all the Reparenco employees to Smurfit Kappa. We believe there is a strong cultural fit between our businesses, and that together we will generate value in the short, medium and long term for all our stakeholders.”