SOUTH AFRICA – Paper and packaging product group Mondi has said it will acquire Istanbul-listed Olmuksan, a Turkish corrugated packaging player, for US$81.5 million.
Mondi said in a Johannesburg Stock Exchange regulatory filing that it would buy 90.38 percent of the outstanding shares in Olmuksan International Paper Ambalaj Sanayi ve Ticaret A.S (Olmuksan), from International Paper.
The implied enterprise value of the Turkish company, on a 100 percent basis, would amount to around US$108.6 million.
Olmuksan is a well-established corrugated packaging player in Turkey and its five plants provide a diverse customer base with sustainable packaging for food, beverage, agriculture, and industrial applications.
Olmuksan produced 256 000 tons of corrugated packaging in the 12 months to September 30, while revenues came to US$185 million but reported a US$12.3million loss at its last year-end.
Mondi has operated in Turkey for many years and has a strong understanding of the market and its long-term opportunities, the group said.
“Leveraging our expertise and experience in this market, with our global virgin and recycled container-board portfolio, we expect significant operational improvements and paper integration upside”Andrew King – CEO, Mondi
Mondi CEO Andrew King said their current Turkish footprint included four corrugated packaging plants and a recycled containerboard paper mill, and three flexible packaging sites.
“Leveraging our expertise and experience in this market, with our global virgin and recycled container-board portfolio, we expect significant operational improvements and paper integration upside,” he said.
He said the acquisition was an opportunity to “significantly strengthen our position in the fast-growing Turkish corrugated market and expand our offering in the region.”
The transaction was expected to complete in the first half of 2021.
After the transaction, Mondi will launch a mandatory offer to acquire the remaining 9.62% of shares in the company held by minority shareholders.
The acquisition in corrugated packaging follows Mondi experiencing strong demand for this kind of packaging in the third quarter, driven by e-commerce and consumer applications, and also some recovery in industrial end-users from lows reported in the second quarter.
Mondi’’s third quarter trading update stated in October last year that they achieved good volume growth in Corrugated Solutions measured both year-on-year and sequentially.
Given the strong order position and normalised inventory levels, they are currently in discussions with customers around price increases for various containerboard grades.
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