29th Sep 2014 07:49
LONDON (Alliance News) - Paper packaging products group Smurfit Kappa Group PLC Monday said it has signed a deal to buy Bates Container LLC, a non-integrated corrugated packaging manufacturer operating in the south west US.
The deal, which Smurfit said would be immediately earnings accretive, will include an initial payment of USD150 million, with further deferred payments totalling USD7.5 million.
It expects to complete the deal in the fourth quarter.
Smurfit said earnings before income, depreciation and amortisation for Bates in 2014 are expected to be USD18.5 million and said it has identified USD11.5 million in synergies which it expects to deliver within 24 months of completing the deal.
"The transaction reflects our continued focus on the accretive growth of our operations in the Americas and the combination of Smurfit Kappa Orange County and Bates will increase our market presence and provide us with higher quality earnings in this region," said Gary McGann, Smurfit's chief executive.
Smurfit shares were up 1.1% to 16.835 pence on Monday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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