Amcor will acquire select printing assets of AGI-Shorewood's (ASG) tobacco packaging and specialty folding carton operations for $114.8m.
According to the Australian company, ASG, which has plants or assets in South Korea, US, Mexico and China, reported sales of $126m and EBITDA of $22m for the 2012 calendar year.
The South Korea plant, which has about 30% share of the market, supplies major international customers.
Amcor's acquisition excludes the AGI-Shorewood's Smiths Falls plant in Canada.
Amcor managing director and CEO Ken MacKenzie said the acquisition is in line with the company's strategic objective of expanding its position in emerging markets.
"The attractive purchase multiple and substantial operational cost synergies ensure the acquisition will generate very attractive returns for shareholders," MacKenzie said.
Once the transaction is completed, it will allow ASG to focus on serving its packaging customers in health and beauty, pharmaceutical, confectionery, home entertainment, consumer electronics, spirits, and sporting goods through its 19 plants and eight services centres worldwide.
Expected to deliver a return on investment of more than 20% by the end of year three, the acquisition is set to expand the company's business in Asia and Latin America and includes speciality folding carton production assets in the US.
Net synergy benefits are anticipated to be about $13m and the net cash cost to achieve the synergies is expected to be about $20m.
US-based ASG continues to operate manufacturing facilities in North America, Europe, Asia and Latin America.
Image: Amcor will buy AGI-Shorewood's (ASG) assets for $114.8m. Photo: Amcor Limited