Smurfit Kappa Group plc has announced the agreement to acquire Fabrika Hartije d.o.o. Beograd (‘FHB’) paper mill and Avala Ada d.o.o. Beograd (‘Avala Ada’) corrugated plant, in Belgrade, for a consideration of €133 million from Kappa Star Group.
"We look forward to welcoming their experienced teams into the Smurfit Kappa Group, and we are confident their expertise and the high quality of the companies' asset bases will provide us with an excellent platform to grow in the region and further strengthen our European offering for our new and existing customers," said Tony Smurfit, Smurfit Kappa Group CEO.
The purchase is expanding SKG’s geographic footprint and providing for full containerboard integration in the Group's packaging operations in Southeast Europe.
FHB & Avala Ada
FHB and Avala Ada are well-invested businesses, with a leading market position in Serbia and solid positions in adjacent countries.
The containerboard mill holds another recently upgraded recycled with a current capacity of 120,000 tonnes and significant potential to drive synergies and further increase capacity with a limited investment of capital.
The corrugated plant has a current production of approximately 110 million square metres and produces of corrugated and laminated packaging.
The customer base, in majority local and national customers, provides a strong platform for organic growth with SKG's Pan European and Multi-National customers in the region.
The transaction reflects a pre-synergy multiple of 7.6 times the expected full year 2018 EBITDA and the consideration will be funded from the Group's existing resources.
The expectations are that the transaction will be completed by the end of the year.
Transaction Highlights
The acquisition of the packaging business provides an opportunity to further expand SKG's Pan European footprint while entering a new, well consolidated and growing market;
The acquisition of the high-quality containerboard mill with a current capacity of 120,000 tonnes securing paper integration in the region with significant production expansion potential;
It will be completed at a pre-synergy multiple of 7.6 times the expected full year 2018 EBITDA.
© 2018 Checkout – your source for the latest Irish retail news. Article by Maria Cabecos. Click subscribe to sign up for the Checkout print edition.
