DS Smith to buy Romanian packaging and paper group for EUR208m
DS Smith has agreed to buy Romanian integrated packaging and paper group EcoPack and EcoPaper for an enterprise value of around €208m in a deal that is expected to be immediately enhancing to earnings.
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It said the family-owned business will “significantly” enhance its capacity to serve customers in the region and support the group’s wider Eastern European presence.
The business includes both high quality packaging assets and 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 acquisition consideration and repayment of debt, together totalling €208m, will be financed from existing cash and debt facilities, and from €35m of DS Smith shares to be issued to the vendor. DS Smith said the acquisition is consistent with its medium-term financial targets and equates to a post synergy multiple of around 5 - 6x EBITDA.
Completion is expected within the company’s third fiscal quarter, following Romanian Competition Authority approval and the satisfaction of other customary closing conditions.
Chief executive Miles Roberts said: "We continue to grow very strongly throughout Eastern Europe. This exciting acquisition will further expand our position and capability, providing an important platform for the continued development of our innovative 'performance packaging' programme in the region.”
At 0905 BST, the shares were up 2.4% to 483.50p.