DS Smith wraps up deal for Duropack

DS Smith, maker of corrugated cardboard, recycled paper and plastic packaging, said it agreed to buy Vienna-based packaging business Duropack for about 300 million euros ($341m) from a subsidiary of One Equity Partners.
By The Newsroom
Published 23rd Feb 2015, 13:10 BST

The deal, which helped to push up DS Smith’s shares 3.8 per cent to a record high in trading yesterday, will help the company continue its expansion into southeastern Europe.

“The main driver is Duropack’s business in Hungary, Croatia, Bulgaria, Bosnia, Slovenia, and Macedonia where DS Smith has limited presence, if any, and Duropack has a very strong market leading presence,” chief financial officer Adrian Marsh said.

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DS Smith, whose customers include Procter & Gamble, Nestle and Unilever, said the acquisition would be financed from existing facilities and immediately add to earnings per share.

The company said it expected the acquisition, which is subject to competition clearance, to be completed in the second quarter of the year.

It said it expected cost synergies of 12 million euros to be realised within three years.

JP Morgan Cazenove analysts, reiterating their “overweight” rating on DS Smith’s stock, said the proposed acquisition was strategically sound and attractively priced, at 5.7 times EBITDA “post-synergies”.

Related topics:HungaryEuropeCroatia