Corrugated packaging firm Smurfit Kappa has announced its intention to launch a tender offer to acquire the minority shares in Cartón de Colombia.
Image: Smurfit Kappa plans to buy additional minority stake in Cartón. Photo: Courtesy of Smurfit Kappa.
Smurfit Kappa currently holds 69.94% of the shares in Cartón, which a corrugated cardboard products designer and manufacturer, with experience in packaging.
Shareholders of Cartón are holding approximately 15.54% of the minority shares in Cartón.
Cartón provides corrugated cardboard solutions for businesses and industries to meet their customer needs using the latest technologies in handling the products.
Smurfit Kappa said that the minority shareholders of Cartón have signed agreements with the company to tender their shares into the transaction once launched.
If all the minority shares are tendered, the company is expected to pay a consideration amounting approximately €90m for the transaction, funded from the group’s existing cash resources.
The tender offer is subject to the approval of the Superintendencia Financiera de Colombia.
The company said that it intends to complete the transaction in the second quarter of 2019, depending on the customary completion conditions, adjustments and regulatory approvals.
In November 2018, Smurfit Kappa has agreed to acquire Fabrika Hartije d.o.o. Beograd (FHB) paper mill and Avala Ada d.o.o. Beograd corrugated facility, in Belgrade, Serbia.
Both the facilities are currently owned by the Kappa Star Group. The FHB paper mill is upgraded with a recycled containerboard machine installed with an existing capacity of 120,000 tons.
The company said the paper mill is capable of driving synergies and further increase capacity with a limited investment of capital. The corrugated plant manufactures both corrugated and laminated packaging, and has a current manufacturing capacity of approximately 110 million m².
Smurfit Kappa claims that the acquisition marks the purchase of largest integrated packaging business in Serbia for a consideration of €133m. The group’s existing resources are expected to be used for funding the transaction consideration.
The company said that the agreement represents a pre-synergy multiple of 7.6 times the anticipated full year 2018 EBITDA.