Amcor to acquire AGI-Shorewood tobacco packaging assets

Global packaging company Amcor has agreed a multi-million dollar deal to acquire select printing assets of AGI-Shorewood’s tobacco packaging and specialty folding carton operations.

 

The US$114.8 million deal will see Amcor acquire plants or assets in each of South Korea, the US, Mexico and China. The acquisition excludes the AGI-Shorewood plant in Smiths Falls, Canada.

 

The acquisition expands Amcor’s business in the higher growth regions of Asia and Latin America and includes specialty folding carton production assets in the US. In Mexico, it builds on the position established by Amcor following the recent acquisition of Aluprint.

 

For the 2012 calendar year the acquired business had sales of US$126 million and EBITDA of US$22 million.

 

Net synergy benefits are anticipated to be approximately US$13 million and the net cash cost to achieve these synergies is expected to be approximately US$20 million. The acquisition is expected to deliver a return on investment of more than 20 percent by the end of year three.

 

In South Korea the business has approximately 30 percent share of this high value-add market and supplies major international customers. The plant, built in 2004, is well capitalized, and has a strong technology and product innovation focus.

 

Amcor’s managing director and chief executive officer Ken MacKenzie said: ‘This acquisition is aligned with our strategic objective of expanding our position in emerging markets.

 

'The attractive purchase multiple and substantial operational cost synergies ensure the acquisition will generate very attractive returns for shareholders.’

 

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