Mondi Group has agreed to acquire the bags and kraft paper business of Graphic Packaging International Inc. for a total consideration of $105 million on a debt- and cash-free basis.
The business is a leading player in the production and distribution of kraft paper and bags in the US. The production base comprises an integrated kraft paper mill located in Pine Bluff Arkansas, with production capacity of 135 thousand tonnes per annum, and nine bags plants across the US.The business generated unaudited pro forma sales of approximately $437 million in the 12 months ended March 31, 2014.
The consideration payable for the acquisition will be funded from existing resources available to the Mondi Group. The acquisition is expected to complete towards the end of Q2/early Q3 2014, subject to certain completion conditions, including the approval of the relevant competition authorities.
Commenting on the Acquisition, David Hathorn, chief executive of Mondi Group, says: “The combination of the Business with Mondi’s existing network will create a leading bags player in North America and expand the Group’s growing global footprint in this market. We look forward to offering innovative solutions to our enlarged customer base.
I am confident that the synergies expected from the acquisition, coupled with Mondi’s proven expertise as a leading global kraft paper and industrial bags producer, will ensure that the combined business delivers strongly.”