Recycled Cardboard

DS Smith takes over Duropack


A major supplier of recycled corrugated cardboard packaging products in Europe, DS Smith, announced its acquisition of Duropack for about 300 million Euros.

Duropack, which produces recycled corrugated cardboard packagings, notably niche products mainly targeted to best meet customers’ needs, and has a leading market share on the South-Eastern European market, had been acquired by CP Group 2 BV, a subsidiary of the One Equity Partners fund.

The takeover is complementary to DS Smith geographical presence in the area: thanks to this acquisition, DS Smith will increase its presence in South-East Europe and further strengthen its capacity to deliver service to its existing customers all over Europe, besides being able to access new customers.

Duropack is market leader in many of the areas where it is present. In combination with the already existing DS Smith activities in Hungary, Slovakia and Austria, it will take on a leading position in the entire South-Eastern European area.

Based in Vienna, Duropack has 15 main production plants: it deals with the production of paper and corrugated cardboard in central, Eastern and South-eastern Europe. The company employs about 2,600 people. In 2014, it registered a turnover of 273 million Euros and an Ebitda of 41 million Euros.

Cost synergies amounting to 12 million Euros are expected to be achieved within three years from the acquisition. An additional investment of about 13 million Euros is needed to integrate the takeover; this will be made during the first two years. The investment will be financed by money savings, led by working capital efficiency and cash management.

The total price of the acquisition, including the taking-over of debt, should amount to the already announced 300 million Euros.

The acquisition is financed with already existing credit lines. Profits per share will be immediately increased and during the second year from the acquisition a higher return on the cost of capital will be applied.

The acquisition is subject to the authorization by the Competition Authority.