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SKG to acquire Reparenco for approximately EUR460 million

Smurfit Kappa Group (SKG) is to acquire Reparenco, a privately owned paper and recycling business in the Netherlands, for a cash consideration of approximately EUR460 million.

Reparenco operates a two machine paper mill in the Netherlands with a capacity of 675,000 tonnes together with a 750,000 tonne recovered fibre operation. Reparenco employs 315 people with Gross Assets of EUR189 million and generated EBITDA of EUR41 million in the 12 months to April 2018, during which time the business continued to ramp up production.
 
The acquisition represents a transaction multiple, pre-synergies, of 6.4x the expected full year 2018 EBITDA for Reparenco of EUR72 million.
 
Reparenco’s strong strategic fit with SKG’s existing European businesses is expected to deliver significant synergies in the near-term in a number of areas, including increased integration of containerboard and the recycling operations into the Group.
 
The cash consideration will be funded from the Group’s existing resources. It is expected that the Transaction will complete within four to six weeks subject to customary completion conditions, and adjustments and regulatory approval.
 
Smurfit Kappa Group will host a conference call, for analysts and institutional investors today, 24 May, at 9.00 BST (04.00 ET).
 
Smurfit Kappa Group CEO, Tony Smurfit, says: “We are pleased to announce our agreement to acquire Reparenco, successfully concluding a process which began on 1 February 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.
 
“We welcome all the Reparenco employees to Smurfit Kappa. We believe there is a strong cultural fit between our businesses and that, together, we will generate value in the short, medium and long term for all our stakeholders.”

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