Europe-based corrugated packaging provider DS Smith will be acquiring Spanish corrugated board producer, Andopack for about £35m.
DS Smith said that with this strategic investment, the company would get a direct access to Spain's markets in both Barcelona and Madrid.
The company would get saving opportunities for both cash and cost and also a good platform for growth.
The total investment of £35m is subject to adjustments and represents a post synergy multiple of between 5.0 and 6.0x EBITDA.
DS Smith will sponsor the acquisition through existing cash resources and will deliver a return on invested capital above their cost of capital in the second year of ownership.
The company also released its trading statement saying that its performance was in line with their expectations and the company saw continued good growth across all regions.
DS Smith chief executive Miles Roberts said: "In the first half of this financial year, we have continued to make good progress with our customers, benefitting from our differentiated commercial offering. We have again delivered volume growth ahead of the market, together with improved margins and returns.
"The acquisition of Andopack in Spain is an exciting development for DS Smith as we continue to strengthen our pan-European customer offering. Andopack has high quality assets and we look forward to growing it further as we expand in this attractive market."
Operating across 25 countries with around 20,000 people, DS Smith claims to be the largest fibre recycler in Europe and recovers 5.4 million tonnes of paper and packaging for recycling every year.
Image: Corrugated packaging provider DS Smith has bought Spain's Andopack. Photo: courtesy of Rawich/freedigitalphotos.net.
