Smurfit Kappa GrpPLC Statement re Acquisition of Bates Container Corporation
September 29 2014 - 1:00AM
UK Regulatory
TIDMSKG
Smurfit Kappa Group to acquire Bates Container
SKG:ID SKG:LN
Dublin, London, 29 September, 2014: Smurfit Kappa Group ('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
Bates Container LLC ('Bates'), a non-integrated corrugated
packaging manufacturer in the South West of the United States (the
'Transaction').
Bates is a long-established highly regarded private corrugated
manufacturer strategically positioned to serve and grow its
customer base in the wider Texas region by delivering high quality
differentiated packaging solutions. Bates employs 320 people and a
substantial element of its approximately 135,000 tonnes of
containerboard requirement will be supplied by Smurfit Kappa Orange
County's ('SKOC') containerboard mill in Dallas.
This transaction, which will be immediately earnings accretive,
will involve an initial consideration of US$150 million with a
further estimated deferred payment of US$7.5 million. The
acquisition is expected to complete in the fourth quarter of 2014
subject to customary regulatory approval, with funding from
existing cash reserves. The pro forma 2014 EBITDA for Bates is
expected to be US$18.5 million and the Group has identified
synergies of US$11.5 million which it expects to deliver within 24
months of completion. Inclusive of synergies, the transaction will
carry a pro-forma multiple of 5.25 times EBITDA.
Tony Smurfit, Smurfit Kappa Group COO stated, "This acquisition
fits perfectly with our integrated model, complementing in a
significant way the successful integration of SKOC which was
acquired in December 2012 and providing us with substantial scope
for further synergies in both businesses. These synergies will be
primarily delivered through additional integration of the
containerboard needs of Bates into SKOC's 350,000 tonnes recycled
containerboard mill, with additional savings expected through a
range of operational efficiency measures. Importantly, the Group's
enlarged packaging footprint in the US will further enhance SKG's
capacity to provide innovative, insight-led and value enhancing
packaging solutions to both current and prospective customers".
Gary McGann, Smurfit Kappa Group CEO, said: "We are pleased to
announce our agreement to acquire Bates Container Corporation and
look forward to welcoming the excellent team from Bates into the
Smurfit Kappa Group. The transaction reflects our continued focus
on the accretive growth of our operations in the Americas and the
combination of SKOC and Bates will increase our market presence and
provide us with higher quality earnings in this region."
ENDS
Contact
Seamus Murphy FTI Consulting
Smurfit Kappa Group
T: +353 1 202 7180 T: +353 1 663 36 86
E: ir@smurfitkappa.com E: smurfitkappa@fticonsulting.com
Notes to editors
About Smurfit Kappa
Smurfit Kappa is one of the leading producers of paper-based
packaging in the world, with around 41,000 employees in
approximately 350 production sites across 32 countries and with a
sales revenue of EUR8 billion in 2013.
Innovation, service and pro-activity towards customers, using
sustainable resources, is our primary focus. This focus is enhanced
through us being an integrated producer, with our packaging plants
sourcing the major part of their raw materials from our own paper
mills. We are the European leader in paper-based packaging,
operating in 21 countries selling products including corrugated,
containerboard, bag-in-box, solidboard and solidboard packaging. We
have a growing base in Eastern Europe in many of these product
areas. We also have a key position in other product/market segments
including graphicboard, MG paper and sack paper.
We are the only large scale pan regional player in the Americas,
operating in 11 countries in total in North, Central and South
America.
Check out our microsite: www.openthefuture.info
www.smurfitkappa.com
This information is provided by Business Wire
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