British group DS Smith has bought the paper factories Ecopaper Zarnesti and Ecopack Ghimbav from Romanian investor Vladimir Cohn.
The transaction amounts to EUR 208 million, which includes the two companies’ debts. The British group will finance the acquisition from existing liquidities and loan facilities and will grant EUR 35 million worth of its own shares to Vladimir Cohn, according to an official statement. The deal needs to be approved by Romania’s Competition Council and should be finalized by January 2018.
Ecopaper and Ecopack form one of the biggest integrated packaging and paper groups in Romania. The two companies had cumulated sales of EUR 60 million and net profits of EUR 2.5 million in 2016, with close to 400 employees, according to data from the Finance Ministry. They have high quality packaging assets as well as a new paper machine, built in 2017, that specializes in high quality, light-weight paper, and are primarily focused on serving the local FMCG market, according to DS Smith.
“It is very complementary to our customer and asset base providing an excellent opportunity for further growth as well as significant cost synergies,” the British group’s representatives said in a press release.
The acquisition is part of the group’s strategy to increase its presence in Eastern Europe. DS Smith also has a subsidiary in Romania, in Timisoara, which had sales of EUR 26.4 million and 227 employees in 2016. Overall, the British group had a turnover of GBP 4.78 billion (some EUR 5.5 bln) in the fiscal year ended on April 31, 2017.
(photo source: Ecopack.ro)