DS Smith acquires Romanian packaging company
The business is a leading integrated packaging and paper group in Romania; family owned for many years.
It will significantly enhance DS Smith's capacity to serve customers in this high growth region as well as supporting DS Smith's wider substantial Eastern European presence.
The business includes both high quality packaging assets as well as a new paper machine, built in 2017, that specialises in high quality, light-weight paper, which is particularly well-suited to supporting DS Smith's performance packaging solutions.
The business has grown strongly over many years and is primarily focused on serving the local FMCG market.
It is very complementary to DS Smith's customer and asset base providing an excellent opportunity for further growth as well as significant cost synergies.
The acquisition consideration and repayment of debt, together totalling €208 million, will be satisfied from existing cash and debt facilities, and from €35 million of DS Smith shares to be issued to the vendor.
The acquisition is expected to be earnings enhancing immediately, is consistent with the Group’s medium term financial targets and equates to a post synergy multiple of c. 5 – 6x EBITDA.
Completion is expected within DS Smith's third fiscal quarter, following Romanian Competition Authority approval and the satisfaction of other customary closing conditions. ■