Packaging and recycling firm DS Smith is to acquire European corrugated board packaging firm Duropack for £220m.
The deal with Duropack’s owner, a subsidiary of investors One Equity Partners, is expected to be completed in the summer.
Duropack runs 18 facilities that process around 160,000 tonnes of recycled paper. It also owns 14 corrugated packaging facilities and two paper mills across nine countries, with headquarters in Austria.
The company’s pre-tax profit in 2014 was around £11m.
DS Smith, which also has operations in Hungary, Slovakia and Austria, said the acquisition was “highly complementary”.
A company statement said the cost of integrating Duropack with its existing business models would be around £9.6m over two years.
It added: “This will be funded by cash savings, driven by working capital efficiencies and tight cash management.”
DS Smith chief executive Miles Roberts said: “Duropack is an excellent business and a highly complementary fit. It is a further important step in our strategy to leverage our scale and strengthen our geographic footprint.
“Duropack has high-quality assets with market-leading positions. We look forward to it contributing to the overall growth of DS Smith in attractive markets where we were previously under-represented.”
DS Smith also remained upbeat over its financial performance, after announcing a a 45% year-on-year increase in pretax profit in December, achieved despite a 5% drop in revenue in the first six months of 2014-15.
The company has also recently acquired Andopack, a Spanish corrugated packaging business, consultancy The Less Packaging Company Limited and Kaplast, a Croatia-based injection moulding company.
Roberts said: “Since our half-year, we have continued to make good progress with our customers, benefitting from our differentiated commercial offering and the ongoing roll-out of our design centres.
“Our volume performance has been strong, as the rapidly changing retail environment and consumer buying patterns make well-designed recycled packaging increasingly relevant.”