Smurfit Kappa has closed the acquisition deal of Dutch paper and recycling business Reparenco for €460m, as part of its efforts to increase recycled containerboard capacity in Europe.
The acquisition, which was announced in May this year, represents a transaction six times bigger than the Reparenco’s 2018 expected full year earnings before interest, taxation, depreciation, and amortisation (EBITDA) of €72m.
Smurfit Kappa expects the integration of Reparenco with its existing European businesses to deliver synergies of more than €30m.
The transaction will see 315 of Reparenco employees joining Smurfit Kappa.
According to the company, Reparenco is ‘ideally situated’ in its core European operating region where growth in e-commerce and customers’ demand for paper-based packaging is fuelling demand.
Smurfit Kappa Europe CEO Saverio Mayer said: “There is a strong cultural fit between our businesses and we are excited about the potential for Reparenco within the Smurfit Kappa integrated system.
“The mill is also very well placed on the cost curve and specialises in producing basis weights from 80 to 120 grams which cater for the market’s growing demand for lighter-weight materials.”
With the acquisition, Smurfit Kappa will have an additional 405,000t of recycled containerboard capacity.
Prior to the deal, the group was in need of 700,000t of recycled containerboard.
Smurfit Kappa Europe Paper chief operating officer Laurent Sellier said: “We are also pleased to have acquired a high-quality graphic paper machine very well positioned in its market.
“While the machine offers the potential for conversion to containerboard over the medium-term, our intention is to continue to produce graphic paper for our customers for the foreseeable future.”
The acquisition will give Smurfit Kappa access to a two-machine paper mill in the Netherlands with a capacity of 675,000t.
The mill also includes a 750,000t recovered fibre operation, which will allow the company to increase its security and quality of raw material supply.