Monday, 23 February 2015

DS Smith - Duropack Acquisition

DS Smith is a leading provider of corrugated packaging in Europe and of specialist plastic packaging worldwide. They operate across 25 countries and employ around 21,500 people. It is the UK's leading producer of recycled paper board and manufacturer of corrugated packaging

The company has grown to become a European leading provider of consumer packaging with emphasis on state-of-the art packaging design. It is a market leading recycling and waste management company and now the largest paper recycler in Europe, collecting circa 5.4m tonnes annually.

Customers include Nestle, Unilever and Procter & Gamble.

DS Smith rejoined my portfolio following the final results last June - here’s a link.

Following on from the strong interim results reported last December, the company has today announced its intention to buy Vienna-based Duropack, a recycled corrugated board packaging business for around €300m (link via Investegate). The acquisition is being funded from existing debt facilities and will expand the group's geographic footprint in South Eastern Europe. The group expects to secure the deal during the second quarter.

CFO, Adrian Marsh said: "The main driver is Duropack's business in Hungary, Croatia,
Bulgaria, Bosnia, Slovenia, and Macedonia where DS Smith has limited presence, if any, and Duropack has a very strong market leading presence,"

DS Smith also said it continued to perform in line with expectations during the last three months to 31st January due to high volumes.

The announcement was well received by the market and at the time of posting, the share price was up over 3% at 360p - and an increase of over 20% since the interims.

More on this following the final results in June.

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