Smurfit Kappa has acquired two integrated paper-based packaging businesses, Industria de Embalagens Santana and Paema Embalagens, based in Brazil, for a total consideration of approximately €186 million (R$805 million).
Both INPA and Paema are privately owned integrated packaging businesses. The combined operations have three recycled containerboard mills with a total capacity of 210,000 tons and four corrugated facilities servicing the Northeast of Brazil, through the Rio and Sao Paulo regions and the south of the country. The net assets of INPA and Paema at Sept. 30, 2015 were €30 million (R$129 million) and €6 million (R$26 million) respectively.
The size and location of the combined operations will build on the Group’s leadership position as the largest pan-regional corrugated packaging supplier in Latin America. The Group’s enlarged global footprint will improve its packaging offering to multinationals operating throughout the Americas region.
The combined business employs more than 1,700 people, and the Group currently expects to generate synergies of approximately €6 million (R$28 million) by the end of 2017. The transaction was completed at the end of December 2015 and will be immediately earnings accretive.
“We are pleased to announce the acquisition of INPA and Paema, which will extend our reach into a strategically important market and build on our geographic diversity and strength,” said Tony Smurfit, Smurfit Kappa Group CEO. “We are confident that their expertise and the high quality of their asset base will provide us with a strong entry point into the Brazilian market and, as the leading pan-regional operator in Latin America, further strengthen our service offering to our existing international customers.”