Smurfit Kappa will acquire non-integrated corrugated, folding cartons and flexible packaging manufacturer Grupo CYBSA to enhance its footprint in the growing Central American market.
CYBSA operates five packaging plants in El Salvador and Costa Rica and recorded net assets of $40m in the year ending on 31 December 2014.
Currently, the company employs around 1,000 people and provides its services to a growing customer base in its domestic markets, along with Guatemala and Honduras.
As Smurfit completes acquisitions worth €160m in the Americas in 2014, the company hopes that the new CYBSA deal will tubocharge its growth across 12 countries from the southern US to Argentina.
Smurfit Kappa Group CEO Gary McGann said: "We are very pleased to announce our agreement to acquire CYBSA and look forward to welcoming the excellent team from CYBSA into the Smurfit Kappa Group.
"The transaction reflects our continued commitment to increase our market presence in the Americas and will further enhance SKG's capacity to provide innovative, insight-led, differentiated and value enhancing packaging solutions to both current and prospective customers throughout the Americas."
Smurfit is expecting to close the transaction, which is subject to customary closing conditions and regulatory approval, in the second quarter of 2015.
The group said that it will complete the acquisition at a post synergies multiple of 5.5 times EBITDA. Its 2014 EBITDA was almost $13m and expected synergies of approximately $6m, of which over $4m will be delivered in year one.
The Smurfit group currently operates from 21 countries in Europe and 11 in the Americas employing approximately 42,000 people.
Image: Smurfit Kappa specializes in producing corrugated packaging. Photo: courtesy of Smurfit Kappa Group.
