Smurfit Kappa acquires two Brazilian-based firms for €186m
Irish packaging giant Smurfit Kappa has announced the acquisition of two Brazilian integrated paper-based packaging businesses in a deal worth €186m.
The two privately-owned businesses, INPA and Paema, combined operate three recycled containerboard mills with a total capacity of 210,000 tonnes, along with four corrugated facilities servicing the Northeast of Brazil, through the Rio and Sao Paulo regions and the south of the country.
The net assets of INPA and Paema at 30 September were €30m and €6m respectively.
The Dublin-headquartered packaging group had previously indicated its desire to enter the Brazilian market but to date acquisition multiples had proven to rich.
The combined business employs over 1,700 people and the Group expects to generate synergies of around €6m to be delivered by the end of 2017, primarily through operational improvements and supply chain optimisation as the businesses are integrated.
The deal extends Smurfit Kappa’s reach to the entire South American continent and further advances the company’s desire to build its platform in the Americas.
The transaction was completed at the end of December 2015 and will be immediately earnings accretive.
Smurfit Kappa Group CEO Tony Smurfit said the acquisition will “extend our reach into a strategically important market and build on our geographic diversity and strength.
“We look forward to welcoming the experienced teams into the Smurfit Kappa Group. We are confident that their expertise and the high quality of their asset base will provide us with a strong entry point into the Brazilian market and, as the leading pan-regional operator in Latin America, further strengthen our service offering to our existing international customers,” he added.
Smurfit Kappa is a world leading producer of paper-based packaging with around 43,000 employees across 33 countries and sales of €8.1 billion in 2014.
