DS Smith Plc, U.K., a producer of recycled corrugated packaging in Europe, this week announced that it will acquire the corrugated activities of Grupo Lantero, Iberia, including several operations in which DS Smith currently has a minority holding. The business is a well-invested corrugated producer with a strong focus in the FMCG sector, operating seven sites across Spain. 

DS Smith noted that this acquisition significantly strengthens its operations in Spain, an important and growing market for corrugated packaging, taking its market share to approximately 10%. It also builds on our recent acquisition of Andopack in calendar Q4 2014, where DSW Smith says it has seen a very positive customer reaction to its product and service offering. The acquisition is subject to competition clearance, which D.S. Smith expects during the third quarter of this year, with completion shortly thereafter.

The total consideration, including the assumption of debt, is expected to be some EUR 190 million, subject to closing adjustments, representing a post synergy multiple of between five and six times EBITDA. The transaction is being financed from existing cash resources and is expected to deliver a return on invested capital above our cost of capital in the second year of ownership.

Miles Roberts, chief executive of DS Smith said that "we are delighted to announce the acquisition of the corrugated activities of Grupo Lantero. It is a high quality business that we have known and partnered with for a number of years and significantly increases our offering to Pan-European customers in this large and growing market. It is a further important step in our strategy to leverage our scale and strengthen our geographic footprint and we look forward to working with Grupo Lantero stakeholders and contributing to the overall growth of DS Smith."

Enric Holzbacher, chief executive of Grupo Lantero, added that "we are very pleased to hand over our corrugated packaging business to our partner DS Smith. We are convinced that DS Smith has a strong alignment with our FMCG sector and will further develop our well established customer relationships. Grupo Lantero has decided to strategically focus its activities on its multinational rigid and flexible plastic divisions, Coexpan and Emsur."