DS Smith has received acceptances representing 98.8% of the total share capital of Papeles y Cartones de Europa, known as Europac, satisfying the final condition for the acquisition of paper and packaging products manufacturer.
Image: DS Smith acquisition offer gets overwhelming response from Europac shareholders. Photo: Courtesy of DS Smith.
The company made the offer to Europac shareholders on December 3, 2018.
DS Smith said that the board of the Spanish Securities Market Commission (CNMV) has announced the result of the offer launched by the company.
Securing the approval has cleared the final condition for the acquisition of the Spanish company by DS Smith. Consequently, settlement and completion are expected to be taken up around January 22, 2019.
In June 2018, DS Smith announced the proposed acquisition of Europac, a vertically integrated packaging business with a diversified customer portfolio. In 2017, the company made revenue of €868m and had recurring EBITDA of €147m.
The recurring EBITDA was €157m and net profit €79m in the first nine months of 2018, compared to €104m and €58m in the corresponding period of 2017.
DS Smith’s offer price of €16.80 per Europac share takes the entire share capital of Europac at €1,667m (£1,453m), with an enterprise value of €1,904m (£1,659m), representing an EV/EBITDA multiple of 8.4 times Europac’s LTM EBITDA to 31 March 2018.
DS Smith expects the acquisition of Europac to improve its offer for customers; develop Europac’s packaging assets; strengthen DS Smith’s global supply chain; realize annual run-rate pre-tax cost synergies of €50m (£44m); integration benefits; and result in attractive financial returns.
After the offer was made, Europac’s board of directors said that acquisition is friendly and attractive, and DS Smith received undertakings to accept the acquisition from a total of 58.97% of the share capital of Europac.
Goldman Sachs is acting as lead financial adviser to DS Smith in connection with the acquisition; JP Morgan Securities as financial adviser and sponsor; GSI and JPMC as joint underwriters on debt financing; and Citigroup Global Markets, GSI and JPMC as joint underwriters on equity financing.
DS Smith Group CEO Miles Roberts said: “I am delighted with the support from Europac shareholders. We look forward to welcoming Europac employees into the DS Smith Group and integrating the businesses to the benefit of all our stakeholders.
“This acquisition is a fantastic opportunity to enhance our customer coverage and offering in this important region.”