LIVIA Group acquires two board & packaging mills from Smurfit Kappa

05 June 2018 Authored by Consultancy.eu

Two weeks after Smurfit Kappa acquired Reparenco in a deal worth around €460 million, the packaging manufacturer has sold its German subsidiaries Smurfit Kappa Packaging and Smurfit Kappa Baden Karton to Munich-based investor LIVIA.

With revenues of €8.6 billion, generated by approximately 46,000 employees in 35 countries, Smurfit Kappa is one of the globe’s leading providers of paper-based packaging solutions.

The firm’s new strategy has seen the company grow strongly in recent years (up €600 million from 2013), in part on the back of an M&A strategy. While a number of acquisitions have been bolted-on across the globe, including that of Reparenco in May, which added a two machine paper mill in the Netherlands with a capacity of 675,000 tonnes together with a 750,000 tonne recovered fibre operation, the company has now also divested an arm in Germany deemed ‘non-core’.

The Baden site, which has 298 employees, is located in Gernsbach in South West Germany and comprises both a mill and board conversion plant. The mill produces 152,000 tons of recycled carton board for primary packaging for a variety of products (‘Smurfit Kappa Baden Karton’), while the conversion plant manufactures 64 million square metres of folding board boxes annually (‘Smurfit Kappa Packaging’) for consumer food products.

Commenting on the divestment, Thomas Ruth, CEO of Smurfit Kappa Baden Packaging, said that the white line chipboard commodity grade produced is “not a core paper grade for Smurfit Kappa”. The divestment carves-out a value of around €100 million from Smurfit Kappa’s overall revenue.LIVIA Group acquires two board & packaging mills from Smurfit Kappa

An independent future

The new owner, LIVIA Corporate Development, is the private equity wing of LIVIA Group, an independent industrial holding based in Germany. The investment arm specialises in acquiring corporate spin-offs / carve-outs as well as midsized companies with revenues between €20m and €1.5 billion, with the aim of bolstering business performance through a combination of operational improvement and other synergetic strategies.

"We are delighted to have closed this deal. The two Smurfit Kappa Baden plants fit our investment focus very well, as they will require a partner to support the successful implementation of sustainable growth and optimisation strategies. Together with the dedicated workforce we will further develop existing customer relationships and focus on new business opportunities in the board and packaging market,” stated Peter Löw, founder and owner of LIVIA Group.

Throughout the acquisition, Löw was advised by Fortaleza Capital, a Dutch M&A firm that has a focus on the packaging industry. Earlier this year the M&A consultancy advised on the deal between a Belgian (P. Van De Velde Group) and Dutch player Wesly Printing & Packaging), in a cross-border deal that saw the acquirer ramp up its revenue base to €75 million. Buyer Smurfit Kappa tapped Hogal Lovells for external legal support.

Looking ahead, Löw highlighted that LIVIA will now start its investment plan into the packaging mills, which includes the recruitment of new employees in strategic areas such as sourcing, marketing and sales. “A staff reduction is not planned, we will focus on expanding the already strong market position.”

According to recent research from KPMG, the number of deals closed in Europe last year reached its highest point since the outbreak of the financial crisis.

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