Irish corrugated and paper-based packaging firm Smurfit Kappa has agreed to acquire Netherlands-based paper and recycling business, Reparenco, for around €460m.

Paper mill

Image: Smurfit Kappa Group’s paper mill in Netherlands. Photo: courtesy of Smurfit Kappa Group.

With around 315 employees, Reparenco operates paper mill with a capacity of 675,000 tonnes in the Netherlands.

The mill includes two machines with a capacity of 405,000 tonnes of recycled containerboard and 270,000 tonnes of graphic paper, which can be converted into containerboard.

Reparenco’s mill also includes a 750,000 tonne recovered fibre operation. The mill will help expand Smurfit Kappa’s paper integration capacity, which is currently short of 700,000 tonnes of recycled containerboard in Europe.

The acquisition will help Smurfit Kappa to deliver significant synergies in multiple areas, including increased integration of containerboard and the recycling operations into the group.

Reparenco, which has gross assets of €189m, reported earnings before interest, tax, depreciation and amortization (EBITDA) of €41m for the last fiscal year ended on April 2018.

Subject to customary completion conditions and regulatory approval, the deal is expected to complete within four to six weeks.

Smurfit Kappa Group CEO Tony Smurfit said: We are pleased to announce our agreement to acquire Reparenco, successfully concluding a process which began on February 1st  this year.”

“The acquisition of Reparenco is complementary with our existing business; strengthens our integrated business model; and accelerates a central element of our medium term plan. “

In March this year, Smurfit Kappa rejected an increased takeover offer of €9.5bn ($11.7bn) from the US-based International Paper.

Earlier, Smurfit Kappa rejected International Paper’s €8.6bn ($10.6bn) takeover offer.

Smurfit Kappa said the revised proposal represents an increase in value of only €1.08 per share, equivalent to less than 3%.

Smurfit Kappa provides packaging solutions for the food and drink, consumer good and industrial sectors.

The company’s product portfolio includes container board, paper and board solutions, as well as packaging machinery solutions.

With around 46,000 employees across 35 countries, Smurfit Kappa reported sales of around €8.6bn in 2017.