Acquisition

Acquisition

Smurfit Kappa Group PLC

Smurfit Kappa to expand its Southeast European footprint with the acquisition of the largest integrated packaging business in Serbia

SKG.ID SKG.LN

Smurfit Kappa Group plc ('SKG' or the 'Group'), one of the world's largest manufacturers of paper-based packaging products, with operations in Europe and the Americas, is pleased to announce that it has agreed to acquire Fabrika Hartije d.o.o. Beograd (‘FHB’) paper mill and Avala Ada d.o.o. Beograd (‘Avala Ada’) corrugated plant, in Belgrade, for a consideration of €133 million (the ‘Transaction’) from Kappa Star Group.

The acquisition will expand SKG’s geographic footprint and provide for full containerboard integration in the Group's packaging operations in Southeast Europe. FHB and Avala Ada are well invested businesses, with a leading market position in Serbia and solid positions in adjacent countries.

The containerboard mill holds one recently upgraded recycled containerboard machine with a current capacity of 120,000 tonnes and significant potential to drive synergies and further increase capacity with a limited investment of capital. The corrugated plant has a current production of approximately 110 million square metres and produces both corrugated and laminated packaging. Its customer base is predominantly composed of local and national customers, providing a strong platform for organic growth with SKG's Pan European and Multi National customers in the region.

The transaction reflects a pre-synergy multiple of 7.6 times the expected full year 2018 EBITDA and the consideration will be funded from the Group's existing resources. It is expected that the Transaction will complete by year end subject to customary completion conditions.

Transaction Highlights

• Acquisition of packaging business provides opportunity to further expand SKG's Pan European footprint while entering a new, well consolidated and growing market.
• Acquisition of high quality containerboard mill with a current capacity of 120,000 tonnes securing paper integration in the region with significant production expansion potential.
• Completed at pre-synergy multiple of 7.6 times the expected full year 2018 EBITDA.

Smurfit Kappa Group CEO, Tony Smurfit, commented: “We are pleased to announce our agreement to acquire FHB and Avala Ada, which will be a cornerstone to the expansion of our business in Southeast Europe. We look forward to welcoming their experienced teams into the Smurfit Kappa Group, and we are confident their expertise and the high quality of the companies' asset bases will provide us with an excellent platform to grow in the region and further strengthen our European offering for our new and existing customers.

ENDS

Contact
Garrett Quinn				FTI Consulting
Smurfit Kappa Group
T: [phone]				T: [phone]
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About Smurfit Kappa

Smurfit Kappa, a FTSE 100 company, is one of the leading providers of paper-based packaging solutions in the world, with around 45,000 employees in approximately 350 production sites across 33 countries and with revenue of €8.6 billion in 2017. We are located in 21 countries in Europe, and 12 in the Americas. We are the only large-scale pan-regional player in Latin America.

With our proactive team we relentlessly use our extensive experience and expertise, supported by our scale, to open up opportunities for our customers. We collaborate with forward-thinking customers by sharing superior product knowledge, market understanding and insights in packaging trends to ensure business success in their markets. We have an unrivalled portfolio of paper-packaging solutions, which is constantly updated with our market-leading innovations. This is enhanced through the benefits of our integration, with optimal paper design, logistics, timeliness of service, and our packaging plants sourcing most of their raw materials from our own paper mills.

Our products, which are 100% renewable and produced sustainably, improve the environmental footprint of our customers.

Follow us on Twitter at @smurfitkappa and on LinkedIn at ‘Smurfit Kappa’.

www.smurfitkappa.com

View source version on businesswire.com: https://www.businesswire.com/news/home/20181031005281/en/