Dublin, Ireland 24 May 2018 -- Smurfit Kappa Group plc ("SKG" or the "Group"), one of the world's largest integrated manufacturers of paper-based packaging products with operations in Europe and the Americas, is pleased to announce that it has agreed to acquire Reparenco, a privately owned paper and recycling business in the Netherlands, for a cash consideration of approximately €460 million (the 'Transaction') following a competitive process.
Reparenco operates a two machine paper mill in the Netherlands with a capacity of 675,000 tonnes together with a 750,000 tonne recovered fibre operation. Reparenco employs 315 people with Gross Assets of €189 million and generated EBITDA of €41 million in the 12 months to April 2018, during which time the business continued to ramp up production.
The acquisition represents a transaction multiple, pre-synergies, of 6.4x the expected full year 2018 EBITDA for Reparenco of €72 million.
Reparenco's strong strategic fit with SKG's existing European businesses is expected to deliver significant synergies in the near-term in a number of areas, including increased integration of containerboard and the recycling operations into the Group.
The cash consideration will be funded from the Group's existing resources. It is expected that the Transaction will complete within four to six weeks subject to customary completion conditions and adjustments and regulatory approval.
Accelerates the Group's strategic objectives under its Medium Term Plan;
Delivers EBITDA day 1 with no start-up risk;
Acquisition of a paper mill with a capacity of 675,000 tonnes in SKG's core operating region in Europe;
Mill comprises two machines with capacity of 405,000 tonnes of recycled containerboard and 270,000 tonnes of graphic paper (with the potential for conversion to containerboard);
Mill includes a 750,000 tonne recovered fibre operation;and,
Strengthens SKG's paper integration - the Group is currently short 700,000 tonnes of recycled containerboard in Europe.
Smurfit Kappa Group CEO, Tony Smurfit, commented: "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."
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