Australian packaging company Amcor has announced its agreement to acquire select printing assets of AGI-Shorewood’s (ASG) Tobacco Packaging and Specialty Folding Carton Operations for $115m.
The acquired business has plants or assets in each of South Korea, US, Mexico and China and reported sales of $126m and earnings before interest, taxes, depreciation, and amortization (EBITDA) of $22m for the 2012 calendar year.
The acquisition, which excludes ASG's plant in Smiths Falls, Canada, is set to expand Amcor's business in Asia and Latin America and includes speciality folding carton production assets in the US.
Amcor managing director and CEO Ken MacKenzie said the purchase multiple and substantial operational cost synergies make sure that the acquisition will generate good returns for shareholders.
"This acquisition is aligned with our strategic objective of expanding our position in emerging markets," MacKenzie said.
According to the company, the acquisition is expected to deliver a return on investment of more than 20% by the end of year three.
In South Korea the business has about 30% share of the high value add market and serves international customers.
