Amcor: Flexibles acquisitions

Packaging group Amcor Ltd. said on 23 April that it had agreed to buy Tobepal SA, the flexible packaging and extrusion operations of the Tobepal Group of Spain, for an undisclosed sum. Amcor“s move c…

Packaging group Amcor Ltd. said on 23 April that it had agreed to buy Tobepal SA, the flexible packaging and extrusion operations of the Tobepal Group of Spain, for an undisclosed sum. Amcor“s move continues its strategy to become one of the world“s top five packaging groups, following a three-way merger last year with Danisco and Akerlund & Rausing in Europe and its bolt-on purchase last month of two food flexible packaging plants from Rexam Plc . The Tobepal price tag represented an EBITDA (earnings before interest, tax, depreciation and amortization) multiple of 6.2 times the last 12 month“s earnings, Amcor said. It expected to achieve its target of a 15% return on funds employed by year three on the Tobepal business, which will increase the group“s sales in the high growth pharmaceutical, healthcare and cosmetic packaging markets. The purchase would give Amcor a market share of about 25% in Spain, where Tobepal SA operates three plants with combined sales of EUR 74 million. Shares in Amcor rose after the announcement before slipping 0.5%, slightly more than the broader market, to A$ 7.58 in early afternoon trade, and giving the group a market capitalization of A$ 4.99 billion. Analysts said the company was increasingly becoming a defensive stock, supplying packaging for food, tobacco and drugs, but its input costs remained cyclical. Amcor also intends to buy two flexible packaging plants in the UK, at Ledbury and Thetford, from Rexam Plc for $A 30.9 million. Both plants, which have combined assets of $A 41 million, generated combined sales of $A 115 million in 2001. Amcor says the plants will fit excellently with the group“s European flexible packaging business, with Thetford“s leadership in high barrier vacuum metallising and coating technology and Ledbury“s specialty for the produce and bakery sectors. Amcor managing director Russell Jones says the new acquisitions will strengthen Amcor“s market leadership position in Britain.