MONDI Group will buy Beepack, a Russian maker of corrugated packaging trays and boxes for agricultural products, the company said on Monday.
The €41m transaction on a debt-and-cash-free basis remains subject to conditions and is expected to be completed before the end of the year. Mondi has packaging manufacturing operations in central Europe, Russia, North America and SA.
Situated in the Lipetsk region of Russia, about 400km south of Moscow, Beepack’s customers include Russian food producers and international producers.
"The acquisition of Beepack supports the ongoing development of our corrugated packaging business in central and eastern Europe," Mondi CEO David Hathorn said in the statement. "It enables us to enter a market with strong growth potential, while expanding our geographic reach to better serve our customers."
Beepack generated revenues of €41m and adjusted earnings before interest, tax, depreciation and amortisation (ebitda) of €7m for the year to end-December 2015.
Late in September, investment banker Jefferies International in London raised the target price of Mondi to 1,900 pence per share from 1,800p a share previously, reaffirming it as a buy.
It said that Mondi’s third-quarter interim management statement due to be released on October 13 was expected to be upbeat, with "confident" outlooks for volumes and pricing.
The group’s consistent cash generation gave it flexibility for accretive mergers and acquisitions, Jefferies said.
Hathorn had said in August during Mondi’s June interim results presentation that the group’s core focus was on continued growth in packaging. This included organic growth and acquisitions across the spectrum of consumer packaging.
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