Compelo Packaging - Latest industry news and analysis is using cookies

ContinueLearn More

Smurfit Kappa to acquire US containerboard manufacturer for $340m

Irish paper-based packaging producer Smurfit Kappa Group (SKG) has agreed to acquire corrugated and containerboard manufacturer Orange County Container Group (OCCG) for $340m.

The transaction, which is expected to conclude in the fourth quarter of 2012, further increases the contribution of SKG’s existing Latin American business and provides it with a significant position within the key Maquiladora trading region.

According to SKG, the acquisition delivers immediate earnings growth for the company and strengthens its existing position in the Mexican market. SKG will also transfer some of its European recycled containerboard and corrugated innovation and production experience to OCCG’s mill and corrugated operations.

SKG is acquiring OCCG and its assets including its production facilities; recycling centers; brands, trademarks; and customer contracts.

The deal will be completed in the fourth quarter of 2012 and upon completion, the OCCG business will be progressively integrated with the SKG’s operations in Mexico.

OCCG, which has operations in northern Mexico and the southern US, is expected to generate $53m of EBITDA for the full year 2012. Its assets include eight main packaging facilities in Mexico comprising two box plants, three sheet plants and three fulfilment centers, seven distribution centers in Mexico, two packaging facilities in the southern part of the US comprising one box and one sheet plant.

The assets also include a 290,000t recycled containerboard mill in the southern part of the US and a substantial US-based recovered paper collection system.