Smurfit Kappa seals €460m Dutch deal

SMURFIT Kappa has completed its €460m purchase of Dutch firm Raparenco.

The acquisition is expected to deliver synergies worth more than €30m.

Smurfit Kappa said the acquisition represents a transaction multiple, pre-synergies, of 6.4 times Reparenco’s 2018 expected full-year earnings before interest, tax, depreciation and amortisation (ebitda) of €72m. Including synergies, the acquisition multiple is less than 4.5 times ebitda.

Smurfit Kappa’s CEO of its European division, Saverio Mayer, said Raparenco represents “early delivery” of the group’s medium-term plan to increase its European recycled containerboard capacity.

“It is ideally situated in our core European operating region where we continue to see strong demand driven by growth in e-commerce and increased substitution of plastic with paper-based packaging,” he said.

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.

The mill comprises two machines with capacity of 405,000 tonnes of recycled containerboard and 270,000 tonnes of graphic paper, which could be converted to containerboard.

Last month, Smurfit Kappa raised a €600m bond with part of the proceeds earmarked for the Raparenco acquisition.

The funds will also be used to repay some existing debt.

Last month, a takeover pursuit of Smurfit Kappa by US suitor International Paper came to an end, with the Irish company having rejected the overture.