23rd Feb 2015 07:44
LONDON (Alliance News) - DS Smith PLC on Monday said it is trading in line with expectations as it said it has proposed a EUR300 million deal to buy European corrugated board packaging company Duropack.
The FTSE 250-listed corrugated packaging company said trading in the three months to the end of January, its financial third quarter, was in line with its expectations.
It said volumes have been ahead of the run-rates seen in the first half and were positive in all regions, with particularly strong performances in both central Europe and Italy.
The group also said it has completed the disposal of its testliner mill in France and will take a GBP9 million exceptional charge on the sale.
It also said it has proposed a EUR300 million deal to buy Duropack from CP Group 2 BV, a subsidiary of private equity house One Equity Partners. It said the deal will expand its presence in south eastern Europe.
DS Smith said the deal will be financed via existing debt facilities and will be immediately accretive to its earnings. The takeover is subject to competition clearance in Europe, which it expects to happen in the second quarter of the 2015 calendar year.
"Duropack is an excellent business and a highly complementary fit. It is a further important step in our strategy to leverage our scale and strengthen our geographic footprint. Duropack has high quality assets with market leading positions," said DS Smith Chief Executive Miles Roberts.
"Since our half-year, we have continued to make good progress with our customers, benefiting from our differentiated commercial offering and the ongoing roll out of our design centres. Our volume performance has been strong, as the rapidly changing retail environment and consumer buying patterns make well-designed recycled packaging increasingly relevant," Roberts added.
By Sam Unsted; [email protected]; @SamUAtAlliance
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